The Uttarakhand government has announced exemption in luxury tax for five years on all those old buildings which would be converted into hotels with an investment of 50 per cent of the current market value. The government currently levies five per cent luxury tax on room rents for all hotels in the state.

As per a report in Business Standard, the exemption will be applicable from the date of commencement of the business or other conditions specified in the new notification issued by Principal Secretary (finance) Alok Kumar Jain. “In places like Mussoorie and Nainital, there are several buildings which belong to the colonial era. In case the owners intend to convert them into hotels, we are providing them a good opportunity,” said a government official.

However, at a time when the government has announced new sops for the hotel industry, plans are also afoot to levy 10 per cent tax on all hotels where the room rent is more than Rs 3,500 per day.

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