Excise Department
 

Luxury Tax


As an attempt to mobilise a new source of revenue, the Govt. of Delhi decided to explore an hitherto untapped source of revenue namely the Hospitality Industry. The Luxury Tax was introduced w.e.f from 1.11.1996 on various hotels, lodging houses, clubs etc. "Luxury Provided in hotel" means accommodation and other services provided in a hotel, the rate or charges for which including the charges of air conditioning, telephone, radio, music, extra beds and the like is Rs. 500/- per room per day or more; but does not include the supply of food, drinks or other services which is separately charges for.
Luxuru Hotel
Luxury Hotel

The term "hotel" includes a residential accommodation, a lodging house, an inn, a club, a resort, a farm house, a public house or a building or part of a building, where a residential accommodation is provided by way of business.

Rate of Tax

  • 10% from 1.11.96 on declared tariff.

  • 10% from 1.10.99 on actual/charged tariff.

  • 12.5% from 10.8.2000 on actual/charged tariff.

  • 10% from 2.11.2001 on actual/charged tariff till 30.09.2002.

  • 12.5% from 1.10.2002 on actual/charged tariff.

LIABILITY OF HOTELIERS

No hotelier liable to pay tax under the act shall conduct or cause to be conducted the activity of providing residential accommodation for monetary consideration unless he possess a certificate of registration as provided by the Act. The hotelier who is liable to pay the tax may collect it from the customers.

Where a business is owned, managed or run by a firm, then the firm and each of the partners of the firm shall be jointly and severally liable for payment of tax.

Every hotelier required to possess a certificate of registration shall apply in the prescribed form to the Commissioner within thirty days from the date on which the hotelier first becomes liable to pay the tax.


HOW TO GET REGISTERED

Hotels that come under the purview of Delhi Act on Luxury Tax, 1996 should get themselves registered in the Luxury Tax Department.

(1)     Every application for the registration under section 8 shall be made in Form 4 by a hotelier.

        (a)     Within a period of thirty days from the appointed day if he was liable to pay the tax under the provisions of the Delhi Tax on Luxuries Act, 1996 before the appointed day; and

        (b)     In any other case, within a period of thirty days from the date on which such hotelier first becomes liable to pay the tax.

(2)     A hotelier who has places of business within the jurisdiction of different registering authorities, shall make an application for registration to such authority in whose jurisdiction his chief place of business is located.

 

Basic requirements :- The following are the basic requirements / documents, a hotelier has to submit to get itself registered :-

  • Form 1, 4 and 7 duly completed
  • Photograph of person signing and verifying the application/of all partners in case of a firm.
  • Proof of ownership/possession of property by the hotelier (any document indicating proof of possession e.g. rent, agreement, rent-receipt etc.)
  • Proof of residential addresses as furnished in para-2 of Form 4 - by way of a copy of the ration card / voter’s identity card / driving licence / passport / telephone bill / electricity bill / affidavit / any other documentary proof.

Form No. 1
Form No. 4
Form No. 7

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GRANT OF CERTIFICATE OF REGISTRATION

The Department has to see that each and every relevant document and relevant information, as required, has been furnished by the applicant for the grant of certificate of registration. The certificate of registration shall be issued in form No. 5 and where a hotelier applying for registration is a firm, Hindu undivided family, body corporate or association of individuals or Government, The certificate of registration shall be issued in the name of such firm, family, body corporate, association or Government as the case may be.

Where the hotelier has two or more places of business within the National Capital Territory of Delhi, the registering authority in whose jurisdiction the chief place of business lies, shall issue to the hotelier one copy of certificate of registration for each additional place of business specified in the application for registration.

If due to seasonal tariff fluctuation the rates comes below Rs. 500/- per room per day for a hotelier which has been registered for the rates above Rs. 500/- per room per day, a hotelier can file "NIL" return for that specific period during which the rates are below Rs. 500/- The returns are to be filed by the hotelier on quarterly basis for the period ending 31st March, 30th June, 30th September & 31st December by the end of succeeding month respectively.

CHANGE OF APPLICATION OF TAX FROM "DECLARED RATE" TO "ACTUAL RATE"

The Delhi Tax on Luxuries Act, 1996 which came into force wef 01.11.96 has been introduced to tap on luxuries provided in the Hotel/Guest House. The rate of tax is 12.5% on Rs. 500/- per day per room. The tax was applicable on the declared tariff at the time of inception of the Act according to which hotelier had to pay tax on the declared (printed) tariff irrespective of the tariff which was actually charged. The Act was amended vide notification dated 16.9.99 and the Luxury Tax was actually made applicable on the declared tairff.

However, the exemption to diplomatic missions as mentioned below, was allowed vide notification dated 15.5.2000:-

1.     Persons with diplomatic status in Embassies of other countries in India.

2.     Guest of the Embassies who are accommodated on hotels.

3.     Diplomats coming from abroad for conferences.

4.     Employees, representatives and delegates of United National and its affiliated organizations such as UNICEF, WHO UNESCO, ILO, etc. 

WARNING

The liability or the onus of applying for registration under the Luxury Act lies completely on the hotelier. All the hoteliers who have not registered themselves, must do so at the earliest, as whoever carries on business without being registered in willful contravention, shall on conviction be punished with imprisonment for a term which may be extended to one year with fine.

Formats of various application formats

 

FORM1

[See rule 3(1)(a)]

 

  1. Name of Hotel …………………………………………………………………
  2. Address of Hotel ………………………………………………………………
  3. Telephone Number…………………………………………………………….
  4. Name of Proprietor……………………………………………………………
  5. Name of Managing Director/manager………………………………………..
  6. Accommodation capacity and Tariff…………………………………………
  7. Registration Certificate No…………………………………………………..
Type Room No No of beds Tariff
  Double Occupancy Single occupancy
Single      
Double      
Suite      
Others      
Grand Total      

Signature

Name

Designation

Date-

 

I, the above named Shri…………………………residing at ……………………………..

…………………do hereby solemnly affirm and say that the contents of the above return according to the best of my information and belief.

Place-

Date-

Signature of Hotelier

 

 

 

FORM4

[(See rule 5(1) and (4)]

Serial No…….

Application for Registration under section 8 of the Delhi

Tax on Luxuries Act, 1996

 

To

The Registering Authority

………………………….

…………………………

…………………………

  • I, ……………the…………(state here capacity business known as)……………..
  • I, …………… the………..(state here capacity such as Partner, Manager, Managing Trustee, Director, Secretary, principal Officer) of…………….(state here the name of thefirm, company, local authority, corporation, society, club, association of individuals, Hundu undivided family or trust) carrying on the business known as ………………………………….
  • I, …………..the officer-in-charge of the business known as …………….carried on by the Government of the state of ………………../the Central Government.
  • Where of the * only/*chief place of business within the jurisdiction of the Luxury Tax Officer,……………is situated at the following address…………………., hereby apply for registering me/the said firm, company, local authority, corporation, society club, association of individuals, Hindu undivided family, trust or Government under section 8 of the Delhi Tax on Luxuries Act, 1996.
    1. * The name and permanent residential address of the proprietor/* The names and permanent residential address of all the partners of the business or of all the members

    of the managing committee of the society, club or other association or all of personal having any interest in the business (including the members of a Hindu undivided

    family business), their age and father’s name are as follows (not to be filled in, if the applicant is a body corporate incorporated under any law or a department of

    Government):-

    • Strike out whichever phrase/clause is not applicable.
    Surname Name father's Name Age Permanent residential Address
             

    (If more than 5 names, the above particulars should be entered in separate sheet which should be affixed to this form duly signed and dated by the applicant).

    1. * I, ………*was/*was not ……………liable to pay……..*The said…………………….,The said……………,were/*were

      not tax under the Delhi Tax on Luxuries Act, 1996.

    2. * I, ………*was/*was not…………………………………………………………
  • ……………………………………………………………………………………………………………………………………………………………………………………
    • The said……were/were not formerly registered under the Delhi tax on Luxuries Act, 1996. The details of certificate of the said registration are as follows:-

      Registration Certificate No…………………..

      Date of issue ………………………………..

      Effect of the Registration……………………

    1. I,…………………….,am/am not

    The said@………………….are/ are not registered under the Delhi Sales Tax Act, 1975.

    The details of Certificate of the said registration are as follows;-

  • Registration Certificate No…………………..

    Date of issue ………………………………..

    Effect of the Registration……………………

  • 6.Date of commencement of the business…………………………….

    7.The application for registration is made on account of-

    *(a) having commenced the business since……………and the liability to pay tax in respect there of under the Delhi Tax on Luxuries Act,1996 having commenced with

    effect from………………

    *(b) shifting of place of business from ………to………..with effect from…………….

    *(c) change in the constitution of the business from…………to…………..with effect from………………….

    (d) *part/ * entire transfer of business known as M/s…………….with effect from………

    8. The account of the said business are kept as per * the financial year/ * the accounting year starting on………….. and ending on…………………

    9. The accounts of the said business are kept in the …………..language.

    10. *I,…………………………………………………………….have*

    the said @ ………………….has additional places/places of business at the address enumerated below and have/has no other place of business in the National Capital Territory of Delhi.

    Name and style of business at the

    additional place of business

    Full address of the

    additional place of business

    Registration certificate No

    and its date of issue if applicable

         

    11. A copy of my recent photograph is furnished with this application as required by sub-rule(6) of rule 5.

    12. The above statements are true to the best of my knowledge and belief.

    1. Place and Signature

      Dated and Status and authority there for

    2. Declaration by partners of a firm:-
  • We, the within signed, hereby declare that we are carrying on the business in partnership known as…………….at………………and other places in the National Capital Territory of Delhi and we state that the statements contained in this application for the registration of the said partnership firm and this declaration are true to the best of our knowledge and belief:-
  • S.No Full name of each partner

    including his name, father's name,surname

    Extent of share in partnership Name and address of all

    business in which the partner has any

    share of interest

    Permanent address signature
               
  • Place

    Date

    • Strike out whichever is not applicable.

     

    ( For office use only)

     

    Date on which called ……………………….

    Place at which called……………………….

    Officer before whom called……………….

    Signature of receiving Officer

    ………………………………………………………………………………………………

    Acknowledgement

    Received an application in Form 4 from …………..for registration under section 8 of the Delhi Tax on Luxuries Act, 1996.

    S.N…………………………………

    Date on which the applicant is called

    Place at which the applicant is called

    Officer before whom the applicant is called

    Dated

    Signature of receiving Officer

     

     

     

    FORM 7

    [See rules 9 and 49 (1) (a)]

    Declaration/Revised Declaration under section 31 of the Delhi Tax on Luxuries Act, 1996.

    I/We, …………………… Of……………………………………………………..carrying on the business known as …………………………..at…………………………….the National Capital Territory of Delhi at……………………………and liable to pay the tax under the Delhi Tax on Luxuries Act, 1996, do hereby declare in super session of my/our previous declaration dated……………………………….. that………..

     

    *I/We/myself/ourselves am/are the owner/owners of the hotel in which the above said business is being carried on by me/us.

    *The hotel in which the above said business is being carried on by us is owned by the following person/persons.

    S.No Full name/names of the person/

    persons who owns/own the hotel

    Consititution of the owner (i.e.

    individual firm,body corporate etc.)

    Full address of the owner signature of the owner
             

    I/We do hereby that what is stated here in above is true to the best of my knowledge and belief.

    Place: Signature

    Date: Status

    * Strike out whichever phrase/clause is not applicable.

     

     

     

     

     

     

     

     

     

     


    For other specific details, kindly contact the

    Supdt. (Luxury Tax)
    Room No. 305, 3rd Floor,
    Excise, Entt. & Luxury Tax Department,
    L-Block, I.P. Estate,
    New Delhi-110 002
    Phone :  3370946
    Emaileeltaxes@del2.vsnl.net.in