KHARA, KHAROF Hail FM on Reduction of VAT


SRINAGAR: The Valley hoteliers have appreciated the Finance Minister for reducing the Value Added Tax (VAT) on cooked food items and extension of the existing tax exemptions to tourism sector for another year.

In a joint statement by Kashmir Hotels and Restaurant Association (KHARA) and Kashmir Hotels and Restaurant Owners Federation (KHAROF) have welcomed the government’s decision to reduce the VAT on food items served in hotels, restaurants, food joints, dhabas to 5 per cent from 13.5 per cent.


President KHARA Showkat Chowdhary has said that reduction in VAT on cooked food would help tourism industry in the state.

“It was our long pending demand and we hail the government for its decision. 13. 5 per cent VAT on cooked food item was a burden for hoteliers and restaurant owners,” said Chowdhary.

Notably, both KHARA and KHAROF had many times requested government particularly Finance Minister Abdul Rahim Rather to reduce the VAT which was highest in Kashmir.

The hoteliers urged the finance minster to announce reduction in the rate of VAT which, they said, was charged highest in J&K.

They said the Kashmir Valley has geographic disadvantage and is connected with India by an unreliable road.

 “The Valley imports almost all the items needed for consumption in hotel and restaurant sector from outside the State. The input cost of these items increases due to absence of any rail network. The VAT on sales of food is also charged at 5% in Himachal Pradesh and Rajasthan but our state charged us 13.5 % which further compounded the problem for hoteliers and increases the rates of the food in hotels,” said Chowdhary.


President KHAROF Faiz Ahmad Bakshi said both locals and tourists were unwilling to pay high VAT charges resulting in losses to the hospitality sector.

“We complement the Finance Minister for lowering the rate of VAT on sale of food items served in hotels and restaurants from present 13 per cent to 5 per cent. This is a progressive step which will help the trade and the government to generate the revenue besides extending tax base,” said Bakshi.

He said hospitality sector had to incur huge losses due to high VAT.

“Reduction in taxes will also help us promote our state as the less expensive tourist destination,” he said.

The hoteliers had also demanded extension in the exemption of any kind of tax on room rent till the time the tourism sector stabilizes in the state.

“Existing tax exemptions to tourism sector will continue for another year,” read the statement

Bakshi said the hoteliers had presented detailed proposals to Finance Minister during meetings held with him  and also during pre-budget interactions.

“We had made Finance Minister aware about the advantages of lowering the rate of Vat which he has acknowledged,” said KHAROF president.

KHAROF also hailed Finance Minister for keeping room rent of hotels tax Free for one more year.

“It will help hotel industry in prevailing uncertain conditions,” said Bakshi.

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