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Liquor license fee waiver for hotels?

03 Jan 2021

Upon a request made by hoteliers in the country, the Sri Lankan Government is considering waiving off the annual fee for hotel liquor licenses for the year 2021, The Sunday Morning Business learns. Minister of Trade and Co-Cabinet Spokesperson Dr. Bandula Gunawardena told The Sunday Morning Business that the request is currently with the Ministry of Finance and the relevant Cabinet proposal will be made in the upcoming weeks. The Hotel Association of Sri Lanka (THASL) had made this request from the Department of Excise recently, as hotel liquor licenses have to be renewed for the upcoming year (2021) before the end of the current year (2020). However, amidst disruptions caused by Covid-19 to the local hotel sector, paying the hotel liquor license annual fee was an added burden on hoteliers, THASL President Sanath Ukwatte told The Sunday Morning Business. “In 2020, we have had no business since March. Hotels certainly do not have the financial capacity to pay annual hotel liquor license renewal fee at the moment,” Ukwatte stated. Former Commissioners of Excise A. Bodaragama, who was serving at the Department of Excise when this request was made, stated that the request was transferred to the Ministry of Finance before his retirement. All our attempts to reach Treasury Secretary S.R. Attygalle for a comment proved futile. Following the lifting of the lockdown in May 2020, hotels and tourist establishments were getting business from local travellers. Even though revenue from local travellers is far lower than that of international tourists, local tourism was a welcome relief for the owners of these hotels to keep their businesses up and running with a glimmer of hope. Hotel occupancy rates picked up gradually to about 20% in August and September, mainly due to local tourists. Making things worse, however, on 4 October last year, Sri Lanka detected its second wave of the virus which brought down the occupancy rates to zero. The Tourist Board-approved restaurants and hotel licenses are valid only for one year. In the case of a fresh license being issued during a financial year, such licenses will be issued for the remaining period of that year and for two further consecutive financial years, except in the case of licenses issued to Tourist Board-approved restaurants and hotels where such licenses will be issued for the remaining period of that year only. The Department of Excise issues 45 different types of licenses based on the type of business. License fees are fixed for each type and in certain categories, subsidiary licenses are issued free of charge. A fee of Rs. 7,500 is levied for a non-refundable application. Excise licenses are renewed for periods of three years and the license holder can opt to renew annually. According to the Excise Notification No. 983 in the Excise Ordinance, the annual license fee of the Distillery License, except palmyrah, is Rs. 100 million, while the manufacturer’s wholesale arrack/beer/foreign liquor outlet license, toddy bottling license, wholesale license for liquor, supermarket liquor license, and Tourist Board-approved hotel license for hotels with over 200 rooms are Rs. 1 million each. By the end of 2018, the Department of Excise had issued about 705 hotel licenses and 862 hotel bar licenses.


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