Hoteliers hail Himachal govt move on unauthorised homestays

Ambika Sharma

Solan, July 19

The local hoteliers have welcomed the state government’s proposed crackdown on homestays that are being operated by outsiders in the state as these have been eating into the business of locals.

Paying no taxes

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Homestay units have become a money-spinner for outsiders, as they consider it a profitable venture given the fact that they do not have to pay commercial charges for power and electricity, besides GST. — Winnie Chaddha, adviser, Kasauli Residents and Hoteliers Association

To give an impetus to rural tourism, the state government had permitted running of homestays, where four to six rooms in rural households could be used as tourism units. As per the original concept, those running homestays were supposed to stay on the same complex.

A large number of homestays have come up along major roads leading to Kasauli from the Kalka-Shimla National Highway, including the Kimughat-Chakki Ka Mor. One can see such units in the Kasauli Planning Area comprising the town and 35 villages on its 10-km periphery.

“Over the years, outsiders have found it as a convenient commercial venture and started using their summer houses as homestay units,” said Brijmohan, a villager, who found it difficult to compete with high-end homestays set up by outsiders in the Kasauli area.

Homestays have mushroomed at places like Jagjitnagar, Chabal, Mashobra, Sanawar, etc in the vicinity of Kasauli. These units are booked online. “Their tariff is as high as Rs 8,000-10,000 and they get away without paying taxes. The state government’s move to crackdown on homestays run by outsiders is a welcome move,” said Winnie Chaddha, adviser, Kasauli Residents and Hoteliers Association

“The homestay units have become a money-spinner for outsiders, as they consider it a profitable venture given the fact that they do not have to pay commercial charges for power and electricity, besides GST. A homestay being set up after taking house loan also gives the advantage of 2 to 3 per cent lower rate of tax,” added Chaddha.

Echoing similar views, Balbir Singh, vice president, Rosetum Group of Hotels, Kasauli, said, “With the business suffering due to the vagaries of weather and other reasons, the illegal homestays have added another challenge to Kasauli’s hotel industry.”

“The proliferation of unregistered homestays over the last few years, especially along the major roads in Kasauli, was directly hitting our clientele. The homestay units should be permitted only in rural areas,” added Singh.

Since the hotels have to bear recurring expenditure on salaries of staff, power and water on commercial rate, besides paying taxes, they can ill-afford to compete with the homestays in offering competitive rentals.

Various hotel associations had since long been demanding a crackdown on such units in the state.