Hoteliers take action against BMC for fee hike

MUMBAI, DECEMBER, 20: Livid over the Brihanmumbai Municipal Corporation's (BMC) decision to hike the license renewal fee and Trade Refuse ...

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MUMBAI, DECEMBER, 20: Livid over the Brihanmumbai Municipal Corporation’s (BMC) decision to hike the license renewal fee and Trade Refuse Charge of hotels and restaurants, the Indian Hotel and Restaurant Association (IHRA), a group mostly representing Grade-II and Grade-III food outlets, filed a petition with the high court seeking an injunction on the hike in taxes on Wednesday. The hoteliers would have to pay retrospectively from April 1,2000. The petition will come up for hearing in the first week of January after the court ends its vacation.

This act, IHRA feels will cripple the already faltering industry which has been battered by the recession since the last three years. IHRA has also alleged it has been singled out for unfair hikes by the BMC. According to the new measures announced by the BMC, the Trade Refuse Charge (TRC), a tax paid by the hoteliers for generating garbage has been hiked by 900 per cent for Grade-I, 600 per cent for Grade-II and 300 per cent for Grade-III. "The hike was undertaken after an environmental survey was done by the BMC which reported on how much garbage is generated in Mumbai. On the basis of that report they fixed our TRC charges which is grossly huge. This act will hit our business and we would be left with no option but to hike our rates thus putting off our clients" said the president of IHRA, Ravipal Singh Gandhi.

Though IHRA had agreed to settle for 100 per cent hike in TRC charges, the BMC has rejected it. The hoteliers claim to generate garbage within the 17 per cent category which also includes the garbage generated by the hospitals and the households. The levy of new taxes would further dampen the growth of business which has been dented by the proliferation of the roadside foodstalls in Mumbai from whom no taxes can be collected, lament the hoteliers. "Sixty-per cent of Mumbai’s potential customers who depend on the un-home made food patronise illegal roadside foodstalls. This has resulted in the decline of our sales, thus affecting our profitability. Whereas the foodstalls have no such restrictions since theirs are unlicenced foodstalls," said a member of the IHRA.

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IHRA contends that it has been buffeted by a slew of measures ranging from revision in the minimum wages act every six months, employee state insurance scheme, bonus act and other taxes which are revised frequently.

Meanwhile, the chief engineer of the solid waste management of the BMC V D Mujumdar was unaware of the petition filed in high court by the IHRA. "Until yesterday they were talking with the municipal commissioner to work out some agreement amicably, we are not aware as to why they have approached the court. The taxes imposed are not huge since these hotels generate huge amounts of garbage which has to be transported and treated and which if left abandoned would stink and cause communicable diseases." said Mr Mujumdar.