Non-Himachalis can’t run homestays on land bought in relaxation of law

Non-Himachalis, who have bought land in the state for residential purpose, will not be allowed to run homestays in their houses, as they were permitted to purchase land in relaxation of law for self use and not commercial activity.

A Cabinet sub-committee constituted to look into all issues concerning the running of unregistered homestays has submitted its report to the government. The report is likely to be placed at the Cabinet meeting here tomorrow.

Sources say that the sub-committee has recommended that people from other states, who were given relaxation under Section 118 of the Tenancy And land Reform Act, 1971, to purchase land for residential purpose, will not be allowed to run homestays in their houses. Himachalis, who are not farmers and have bought land in relaxation of Section 118, however, will be allowed to run homestays, they added.

There are several such houses that are being run as homestays. There are 4,289 homestays registered with the state Tourism Department though the actual number may be much higher. Another important recommendation of the sub-committee is that all homestays located within the municipal limits and in the planning areas will be charged commercial rates for water and electricity supply. At present, all homestays are being charged domestic rates and as a result, the government has been losing revenue even as some of these units are making good profits.

However, all homestays located in rural areas will continue to be charged domestic rates for water and electricity. The idea is to take the benefits of tourism to the rural and interior areas and create much-needed employment avenues. The sources say that as per the recommendations of the sub-committee, all homestays in the rural areas will have to take a Goods and Services Tax number (GSTN), besides mandatory registration with the Tourism Department.

It has been found that many unregistered homestays are operating illegally in the state. The sub-committee has also recommended that the nominal registration fee being charged from the homestays should be hiked.

The government had constituted a Cabinet sub-committee, headed by Industries Minister Harshwardhan Chauhan, to look into all issues concerning homestays following repeated pleas from hoteliers that their businesses were getting affected due to the mushrooming of homestays in the state; the homestays do not pay any taxes to the government.

The Cabinet sub-committee held a series of meetings with the stakeholders and took feedback from hoteliers as well as the owners of homestays to have a pragmatic understanding of the issue. Besides, the government is keen that the owners of homestays should at least be made to pay some taxes as post-Covid, they have become very popular with travellers.

Commercial rates for water, power

• Himachalis, who are not farmers and have bought land in relaxation of Section 118, shall be allowed to run homestays, the Cabinet sub-committee has recommended in its report
• All homestays located within the municipal limits and in the planning areas should be charged commercial rates for water and electricity supply, as per the sub-committee
• However, all homestays located in rural areas will continue to be charged domestic rates for water and electricity
• The sub-committee has also recommended that the registration fee being charged from the homestays be hiked