Hotel industry in Udaipur has been stirred by the recent government notices which asked them to pay extra excise duty related to their star ratings in some websites such as Tripadvisor.com, Expedia.com etc.

According to a notification by Excise Division, Finance Department of Government of Rajasthan, dated 31.01.2012, following new proviso has been added:- “Provided also that any person advertise its Hotel as Star Category by any method for facilitating its booking and if such category is higher than the category for which license fee is paid, in such case, license fee for whole of the year shall be charged on the basis of such higher category.”

Informing about the notices, Manish Galundia, Executive Member of Hotel Association of Udaipur and Udaipur Chamber of Commerce and Industry (UCCI), said that if a hotel is rated 3 Star by the Tourism Department and if it is rated as 4 Star in one or more of the several private tourist websites on the internet, than that hotel will have to pay its license fee equivalent to what is paid by a 4 Star hotel.

Galundia also informed that almost 14 hotels in Udaipur have been sent notices by the Excise Division, Finance Department of Government of Rajasthan for being rated higher on the online websites.

A famous hotelier, on the condition of anonymity said, “The government has slapped legal notices and is asking for higher excise duty for being rated higher on tripadvisor.com; this is ridiculous because we do not control such websites and the ratings are just public reviews.”

It should be acknowledged that hotels pay their license fee as stipulated by the Government of Rajasthan on the basis of the star ratings awarded to them by the Tourism Department, Government of India. According to these ratings, 5 Star, 4 Star and 3 Star Hotels pay Rs 15.5 lac, Rs 10.5 lac and Rs 8.5 lac respectively, and other registered hotels in Udaipur pay around Rs 7 lac (As per the circular by State Government dated April 1^st, 2012).

This has shaken the hoteliers and a high profile meeting between the hotel association and the government is on the cards.