Luxury tax in kerala

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Vinodkumar Nair

Manager

24 Points Joined March 2013

Hi,

I had a few queries on Luxury tax in kerala. I am organising a party in a 4*/5* hotel in kerala in May'13 and the hotel guys have said that i need to pay some luxury tax. Have a few queries with regards to this. Just thought if anyone could help me with this.

I believe as a normal customer we are liable to pay this tax, is this correct?

Is there any revision proposed in the financial budget 13-14 for luxury tax.? Is there an increase proposed? What is the current rate in kerala?

In case there is an increase in Luxury Tax and if i pay the full bill in advance before 31/03/13, Will i have to pay the difference amount when the actual event happens (i.e May'13)?

I found a comment suggesting that we only need to pay tax on 70% of a Banquet/Party bill, is this true or does it depend on the state rules?

Would really appreciate if someone could help me with this as soon as possible.

Thanks,

Vinod Nair

Replies (3)

Jishnu Surendran

Finance Manager

312 Points Joined October 2009

Sir,

You have to pay Luxury Tax for the functions you are organizing. If there is any marriage function you are organizing on or after April 1 2013 in any 3 star hotels or above or in a hall with seating capacity of 500 or more you have to pay an additional amount of 3 % of hall rent to the State Government's Mangalya Nidhi.

This is the major amendment in Luxury Tax. Unlike Service Tax, Luxury Tax and Sales Tax does not recognize the concept of levying tax on cash basis. So, although you remit the charges in advance, you have to pay tax as per the amended scheme.

The comment suggesting to pay tax on Banquet bill at the abated 70 % of charges is only for service tax.

So for the functions you are organizing you have to pay.....Service Tax for 70 % of charges...Luxury Tax for total bill....and Mangalyanidhi for hall rent if the case falls under the scheme I have explained above...and also VAT for food and drinks .

Happy Tax Payment !

jinu mm

MBA

23 Points Joined July 2015

thank you for the information, i have to say another example my frnd hasve a hotel in alleppey, halais restaurant, they pay this type of taxs , actually its not a 3 or 5 dtasr but the officesr including him as a lexuruia restaurant , and the houseboat in alleppey / kumarakom houseboats owners payed lots of taxxes, why this type taxed dump in to normasl peoples?....