An unprecedented statewide shutdown gripped Maharashtra’s hospitality sector today, as over 20,000 bars, pubs, and permit rooms ceased operations in a powerful protest against what industry leaders term a “draconian” new liquor tax regime. The ‘Bar Bandh’, orchestrated by the Association of Hotels and Restaurants (AHAR), marks one of the largest industry-led demonstrations in recent memory, highlighting severe fiscal pressures threatening the operational viability of thousands of businesses across the state.
From the bustling nightlife districts of Mumbai to the more localised establishments in Nagpur, Pune, Nashik, and the coastal Konkan region, the closure was largely observed. This collective action underscores the profound distress within the hospitality industry, which contributes significantly to state revenues and employs a substantial workforce. Industry representatives assert that a series of abrupt and substantial tax increases, introduced without adequate consultation, are pushing already beleaguered businesses to the brink of collapse, jeopardising livelihoods and the broader economic stability of urban centres.
At the core of the protest are three critical fiscal measures imposed within the last year: an excise duty hike of 60 per cent, a doubling of Value Added Tax (VAT) on liquor from five per cent to ten per cent, and a 15 per cent increase in annual license fees. Sudhakar Shetty, President of AHAR, articulated the industry’s plight, describing the cumulative effect as a “triple tax tsunami” that has left their repeated appeals to the government unheeded. Many establishments are still grappling with financial setbacks incurred during the pandemic, rendering these new tax burdens particularly onerous.
The widespread participation in the ‘Bandh’ across Maharashtra’s urban and semi-urban hubs reflects a unified front. Bar owners in cities like Nagpur expressed profound concern for their long-term survival, echoing sentiments from Mumbai that the elevated costs are directly impacting consumer affordability and driving clientele towards unregulated, illicit operations. This shift not only undermines legitimate businesses but also poses risks to public safety and leads to a loss of regulated revenue for the state exchequer, creating a less equitable and sustainable economic environment.
As the hospitality sector awaits an official response from the state government, the protest serves as a critical call for a more balanced and phased approach to fiscal policy. Industry stakeholders are not averse to taxation but advocate for a framework that supports the legitimate business ecosystem, prevents the proliferation of informal markets, and ensures the continued contribution of this vital sector to Maharashtra’s economy and urban vibrancy. A constructive dialogue is imperative to forge sustainable solutions that balance revenue generation with the imperative of fostering a robust and equitable business environment for all.
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