“Navi Mumbai Hotel Owners Slam Excise Hike, VAT Surge: Shiva Mudgire and NMHOA Warn of Industry-Wide Collapse”

Navi Mumbai, July 7, 2025 – In a bold and strongly worded press release issued by the Navi Mumbai Hotel Owners Association (NMHOA), Shiva Mudgire, representing the association, has openly criticized the state government over what the industry calls “disastrous and unjustified taxation reforms.”

 Threefold Tax Burden Crushing the Industry:

1. Excise Duty Hike on Alcohol:
   The government has increased excise duties on alcoholic beverages, ostensibly to fund large-scale public infrastructure, healthcare, and election campaign promises. However, NMHOA argues that the liquor industry alone is being unfairly targeted, despite being a key revenue contributor. Shiva Mudgire emphasized that while hoteliers have been granted “industry” status on paper, they have received no real benefits — no subsidies, no concessional loans, and no ease-of-doing-business frameworks.

2. Value Added Tax (VAT) Increase:
   Without consultation or notice, the Ministry of Finance has hiked VAT rates from 5–10%, expanding its applicability across more goods and services. NMHOA highlights that neither hotel associations nor key stakeholders were consulted, despite the fact that they are the ones most impacted.

   “This will create a domino effect — customers will pay more, businesses will lose patrons, and jobs will be at stake,” Mudgire stated.

3. Yearly Excise Fee Hike:
   The industry has also been hit with a 15% hike in annual excise license renewal fees for the year 2025–26. Historically, these fees were adjusted based on 10-year census data. Now, an automatic 10% yearly hike has become the new norm, creating financial instability for small and mid-sized establishments, especially permit rooms.

NMHOA’s Urgent Recommendations to Policymakers:

A) Immediate Abolition of the New VAT Slab, which disproportionately burdens both consumers and business owners.
B) Link annual excise fee increases to census data, ensuring they reflect ground realities.
C) Shift excise duty to the manufacturer level, with capped incremental hikes.
D) Formally involve hoteliers and permit room associations in policymaking, so reforms are based on practical insight.
E) Remove the outdated requirement of a liquor consumption permit in hotels, which NMHOA calls inefficient and obsolete.

 A Grim Warning from the Industry:

The association has warned that if these arbitrary hikes continue, thousands of permit room holders may surrender their licenses en masse.

“The only path left to us is protest. If nothing changes, the legal market will collapse — illegal liquor trade will flourish, tax revenue will plunge, and the government will have only itself to blame,” said Shiva Mudgire.

The COVID-19 pandemic already devastated the industry, with zero compensation or aid from the state. Now, with escalating operational costs, the hospitality sector — one of the top tax contributors — is being pushed to the brink.

The NMHOA has urged the Chief Minister and Finance Minister to take immediate corrective steps to prevent irreversible damage to one of Maharashtra’s most employment-generating and revenue-yielding industries.