16 August 2012
Luxury Tax is levied under “The Maharashtra Tax on Luxuries and By Way of Cess on Other Facilities, Services, Enjoyments, Utilities, Consumption, etc. Act, 1987” (Luxuries Act, 1987). Though previously it covered more categories of assessees, at present it covers only the hotels as a taxable assessee. The tax is levied on hotels, lodging house, clubs and Inn etc. for providing residential accommodation. Luxury Tax is levied at different rates. The applicable rates with effect from 1-5-2010 are as under:
Charges for luxury provide in a hotel per residential accommodation per day Rate of Tax
Upto `.750/- Nil
Exceeding `750/- upto `1200/- 4%
Exceeding `1200/- 10%
* Where the charges are levied otherwise than on daily basis then charges shall be computed proportionately for a day per residential accommodation, based on total charges and total period.
Tax under this Act shall not be levied on the turnover of receipts for supply of food and drinks, on which hotelier has to pay sales tax under MVAT Act, 2002.
Tax collected separately by the hotelier under this Act shall not be considered to be part of the turnover of receipts by the hotelier.
A hotelier having even one room with charges more than ` 750/- per day per accommodation would be liable to pay tax and hence liable for registration u/s.8 of the Act. The hoteliers shall apply for registration within 30 days from the date on which he is first liable to pay tax.
Rule 3: Maintenance of Accounts. Every person shall maintain:
Information of residential accommodation and tariff thereof in Form 1.
Daily accounts of occupation of residential accommodation in the hotel and collection of tax thereof in Form 2 and
Monthly abstract of collection and remittance of tax in Form 3. The register in Forms 1, 2 and 3 shall be certified by an officer duly authorized by the Commissioner.
The Commissioner of Luxury Tax, vide Circular No. 4/1988 dated 24-2-1988, had clarified that hotelier may maintain one register only (instead of three separate registers). At the time of Registration, the register/s shall be signed and sealed by registering authorities. Thereafter new register shall be signed and sealed by assessing authorities.
The Act has been amended w.e.f.1-5-1992. By the said amendment, Luxury Tax @ 12% will be levied on the food and drinks etc. supplied in a club. But the Act also provides that where ‘Sales Tax’ under BST/MVAT Act is levied on any such supply, then Luxury Tax will not be levied in respect of the same supply.
Exemptions from Luxury Tax: Various Notifications are issued u/s. 22 for granting exemptions to certain specified persons or class of persons from Luxury tax in hotels. For details please refer the Notifications issued u/s. 22(1). The last such Notification is LTA-2008/CR-55/Taxation-2 dated 2910.2009.
Vide Notification No. LTA-1090/CR-47/Taxation-2 dated 18th November, 2008, the Government of Maharashtra has exempted the Luxury Tax in excess of 6% on the luxuries provided in hotels during the period 1st May, 2004 to 30th April, 2005. The exemption is subject to certain restrictions and conditions provided in the Notification
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