Hotel stays, party venues and banquet halls in Chandigarh have become more expensive as Chandigarh Administration has doubled the luxury tax in the city by increasing it from 4% to 8%. The new luxury tax rates in Chandigarh have been introduced from immediate effect as of December 2015. This means that arranging weddings, hosting parties or staying in some hotel in Chandigarh will attract additional 4% tax making it more expensive.
New Luxury Tax Rates in Chandigarh:
Old luxury tax rate in Chandigarh = 4%.
New Luxury tax rate in Chandigarh = 8%.
Chandigarh Administration has brought the luxury tax rate in the city at par with Punjab.
Where is luxury tax applicable?
Luxury tax is applicable when you book a venue for your wedding party or stay at a hotel in Chandigarh. Luxury tax is not only applicable on 3 star or 5 star hotels but is also applicable on cheap hotels across Chandigarh. Some examples where you’ll have to pay 8% luxury tax in Chandigarh include:
- Arranging a pre-wedding function, wedding or reception at some banquet hall in Chandigarh.
- Booking a party hall for a family and friends get together. This also includes birthday party halls.
- Staying in a hotel in Chandigarh. This includes all hotels which offer a room above Rs. 200 / night.
- Booking community centres and other venues in Chandigarh for parties / wedding functions.
- All bhawans which offer party halls or rooms including Panchayat Bhawan, Harayana Bhawan, Himachal Bhawan and even community bhawans like Jatt Bhawan.
- All guest houses and dharamshalas in Chandigarh.
- Clubs like Golf club, Lake sports club, Chandigarh club and others will also attract this luxury tax.
All the tax collected as luxury tax from banquet halls and hotels directly goes to the Chandigarh Administration. Earlier when the tax was 4%, UT had earned an annual revenue of 15 crore. After doubling the luxury tax rates, the revenue from this source is expected to go up to Rs. 30 crore.
How much extra will it cost you?
If you book a hotel room in Chandigarh which is for Rs. 2000 per day, it will cost you Rs. 160 more as 8% luxury tax. Although, this is not much, but the real difference will come while booking banquet halls for your functions and social gatherings. 8% tax over 1 lakh comes out to be Rs. 8000 and if the amount goes up to Rs. 2 lakh, then the luxury tax in Chandigarh would be Rs. 16,000.
If you plan to change the venue and select a marriage palace or wedding venue outside of Chandigarh, then also there’s no difference. Luxury tax in Punjab is as high as 10%. So areas of Kharar, Zirakpur, Mohali etc. will cost you something similar.