Himachal Govt all set to charge GST, higher registration fees from homestays

Pratibha Chauhan

Shimla, July 24

The Himachal Government is all set to charge commercial rates for water and power in all urban and planning areas, Goods and Services Tax (GST) and enhanced registration fee from all illegal homestays.

The Cabinet Sub-committee, which met here on Monday, is likely to place its report before the Cabinet with recommendations that will help generate much-needed revenue. The sub-committee is likely to hold another meeting before finalising its report.

“The concept of homestays was developed and promoted to take tourism activities to the interior and rural areas of the state but on the contrary, a majority of the homestays have mushroomed in urban areas and are doing very good business,” says a Tourism Department official.

He adds that 950 homestays are registered with MakeMy Trip without having to pay the GST. As such, GST registration will be made mandatory for all homestays that are registered with the Tourism Department.

The government has also decided to constitute a committee comprising officials of the Tourism, Revenue, Excise and Police departments to streamline the operations of homestays. Though there are 4,289 homestays registered with the Tourism Department, there is no mechanism for their joint inspection. The homestays are not confined to any area but have mushroomed across the state.

One of the major recommendations of the Cabinet Sub-Committee will be to close down all homestays being run in houses constructed by non-Himachalis on land bought in relaxation of Section 118 of the Tenancy and Land Reform Act.

“All such homestays, in some cases given on lease, will have to close operations as the permission to purchase land was purely given for residential purpose,” say sources. People, who are bona fide Himachalis but not agriculturists, will, however, be allowed to run homestays in their residences, they add.

The sub-committee is of the opinion that the registration fee for the homestays should be fixed at Rs 6,000 in rural areas, Rs 10,000 in semi urban areas and Rs 15,000 in urban areas.

Likely to charge commercial rates for power

Since homestays have become the preferred option for a large number of tourists, the government is likely to charge commercial rates for water and power from those located in urban and planning areas.