Staying at budget hotels to become cheaper in Delhi

NEW DELHI: Staying at the city's budget hotels is set to become cheaper with the Delhi government proposing to do away with the luxury tax on hotel rooms having rent up to Rs 1,500 per day, a move aimed at ensuring ease of doing business and attracting tourists.

The Arvind Kejriwal government had approved the proposal in a Cabinet meeting earlier this week and it will now be sent to Lt Governor Najeeb Jung for his approval to amend the Luxury Tax Act.

As per the Delhi Tax on Luxuries Act (1996), any person, who stays at a hotel room whose tariff is Rs 750 per day or above, has to pay luxury tax.

"After the Delhi's Cabinet's approval, government will send the proposal to the Lt Governor to seek his prior approval in amending the Sections 2 and 8 of the Act. Once we get the LG's nod, government will table it in the Delhi Assembly to pass the Bill," said a senior government official.

"It is proposed that the threshold limit of luxury tax be raised from the present room tariff of Rs 750 per room per day to Rs 1500," the proposal said.

The official said the government's decision will ensure ease of doing business in the national capital and benefit those especially tourists who now have to pay luxury tax on a hotel room whose tariff is Rs 750 per day and above.

There are number of budget hotels in Paharganj, Karolbag, Mahipalpur, Daryaganj and others areas of the capital, where most tourists coming to Delhi stay. With the new move, the room rent of these hotels will become cheaper further.

In March, Deputy Chief Minister Manish Sisodia had announced that government would reduce the threshold limit of luxury tax on a hotel room from Rs 750 to Rs 1500 per day while presenting the 2016-17 Budget in the Delhi Assembly.