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Himachal Pradesh to exempt homestay units from Luxury Tax

According to an IANS report, the state government of Himachal Pradesh (HP) has introduced a bill to exempt homestay units from Luxury Tax for five years. Chief Minister of Himachal Pradesh, Prem Kumar Dhumal introduced the bill, Himachal Pradesh Tax on Luxuries (in hotels and lodging houses) Amendment Bill - 2008, on the second day of the assembly session. Under the 'Homestay Scheme', any villager can rent out a portion of his house in rural areas to tourists. Residents are now being encouraged to throw open their doors to both domestic and foreign tourists for home-stay in rural settings, formalising a practice that has anyway been prevalent in the state's scenic Kullu Valley for years. The aim of the Scheme is not only to generate self-employment for people living in villages but also de-congest urban areas.

The Scheme will also check fleecing by hoteliers at popular tourist destinations during the peak season. Now, the budget tourist has the option to stay in private houses in villages. Under the Scheme, an owner of a house located in a village can seek permission from the state tourism department to rent out up to three rooms to the tourists. Each room should have an attached toilet. These home-stay units will not have to pay Sales Tax, and will be charged domestic rates for electricity and water as before. The tourism department of Himachal Pradesh is also planning to train owners of the home-stay units so that they can provide better service to tourists.

Tourism is an important contributor to HP’s economic development. Last year, more than 8.8 million tourists, including 3, 39,000 foreigners, visited the state. Kullu-Manali has emerged as a favourite tourist destination among tourists. Last year, around 1, 00,000 foreign tourists visited the region.

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