Bir hotels face threat from illegal tourism units

Ravinder Sood

Palampur, July 19

The mushrooming of illegal and unregistered homestays, guesthouses and hostels in Bir is posing a serious threat to the organised hotel industry in the hill station. There are over 70 hotels in the area that are registered with the Tourism Department.

The unregistered homestays and guesthouses are depriving the state government of revenue, besides hitting honest taxpayers.

As per the homestay policy of the government, a homestay with four suites is exempted from paying GST and other taxes. The maximum tariff in a homestay has been fixed at Rs 2,500.

However, in the absence of proper checks on part of the state authorities and the Special Area Development Authority, dozens of illegal homestays and guesthouses have come up in the rural areas. Many have more than four suites and are causing a loss to the state exchequer by not paying taxes. The hotel owners have to pay 18 per cent GST on room bookings, besides the property tax.

Hoteliers said many properties, which were not registered with the Tourism Department, were being offered for booking on web portals.

“They do not pay taxes and offer rooms at cheaper rates. The practice has adversely hit the business of the organised hotel industry of Bir-Billing,” a hotel owner said.

The hotel owners said they were bound to follow all rules, including paying fee to the Pollution Control Board, employing labour at minimum wages prescribed by the government and complying with labour laws.

“We are not against tourism units in villages, but these should be run in a legal way. The owners of such units should get their properties registered or be ready to face legal action,” said Satish Abrol, the president of the Bir Hotel Association.

“It has become a cause for concern for the hoteliers of Kangra district. The tourists are coming to Baijnath, but room occupancy is negligible. The reason is that they are going to villages and staying in tourism units that are being run against norms,” another hotelier said.