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Kerala slashes tax rates for off-peak season
Rohit Kaul, New Delhi, February 4, 2014

THE Kerala government has announced major tax concessions and a budget of US$33.2 million for the tourism sector this year.


This was announced in the state budget by Kerala’s finance minister K M Mani last week, who said the luxury tax on hotels and resorts will be reduced from 12.5 per cent to five per cent during the low season of June to August.


Convention centres that charge a daily rent exceeding US$320.20 will see the existing 20 per cent tax dropped to 10 per cent, provided the meetings and conventions have been approved by Kerala Tourism.


President of the Confederation of Kerala Tourism Industry, EM Najeeb, said: “High taxation in segments like MICE and hotels have been a bottleneck in the growth of the tourism sector. We welcome the government’s decision to earmark US$33.2 million for the sector and their decision to reduce luxury tax on hotels and convention facilities.”


Arun Anand, managing director of Midtown Travels, said the high taxes had deterred companies interested in holding conferences in Kerala. “However, now we can expect an increase in the number of international conferences taking place in the state.”


Kerala has allocated US$8 million to develop destinations such as Kovalam, Kumarakom, Thekkady, Fort Kochi, Munnar, Wayanad and Vagamon; US$161,000 towards a rural tourism project in Idukki; and US$79,715 for a sea life leisure park in the beach destination of Varkala.


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