'Tsunami of Unjust Taxes': Hotels and Bars in Maharashtra Fear Total Collapse

Mumbai: Maharashtra’s hotel and restaurant industry is warning of a major crisis after the state government increased several taxes and fees in quick succession.

The Indian Hotel and Restaurant Association (AHAR) has said these tax hikes are like a “tsunami of unjust taxes” hitting an industry that is still struggling to get back on its feet after the Covid-19 pandemic.

In the past year alone, the VAT on liquor has doubled from 5% to 10%, license fees for 2025–26 have gone up by 15%, and excise duty has jumped by 60%. AHAR President Sudhakar Shetty called these hikes a “death blow” to thousands of businesses.

Maharashtra has over 19,000 licensed bars and permit rooms, and the industry directly provides jobs to nearly 4 lakh people. It also supports about 48,000 vendors and an estimated 18 lakh family members who depend on this sector.

AHAR warned that these sharp tax increases could lead to more tax evasion and illegal liquor smuggling across state borders. The price rise will also make liquor less affordable for customers, which may reduce demand and hurt overall business.

The association also said these policies go against the government’s efforts to make Mumbai a top tourist destination. If things don’t change, the state might see fewer tourists, lower business activity, and falling tax collections in the long run.

AHAR has urged the Maharashtra government to take back the recent tax hikes and discuss the matter with people from the industry before it’s too late.