Salient Features

This Act was called the Maharashtra Tax on Luxuries Act, 1987. (Act No. XLI of 1987) which is changed to ‘The Maharashtra Tax on Luxuries and Tax by way of cess on other Facilities, Services, Enjoyments, utilities, consumption, etc., Act, 1987’ w.e.f. 1-5-2001

I. Hotelier’s liability w.e.f. 1-1-1988

1. ‘Luxury provided in a hotel’ means accommodation and other services provided in a hotel. The rate or charge includes the charges for air-conditioning, telephone, television, radio, music, entertainment, extra beds and the like. The rate or charge does not include the supply of foods and drinks, subject to payment of tax on same under MVAT Act, 2002

If the charge is composite for lodging and boarding then a dealer can work out component towards food and drinks as per Rule 59 of MVAT Rules, 2005 and pay tax on such component under MVAT Act and on balance charges under Luxury Tax Act, 1987.

2. ‘Turnover of receipts’ means the aggregate of the amount of monetary consideration received or receivable by a hotelier in respect of the luxuries provided in a hotel during a given period.
3. Tax shall be levied at the rates mentioned in Table below.

Table of rate of tax

4. Appeals

First Appeal under the Luxuries Act lies to Asstt. Commissioner/Dy. Commissioner as the case may be. Second Appeal lies only to Commissioner of Luxury Tax and not to Tribunal. The appeal should be filed within 60 days of communication of order. Rule 47 of the Luxuries Rules prescribes court fee stamps for filing appeal. For First Appeal against Sales Tax Officer’s Order, court fee stamp is ₹ 5 against Asst. Commissioner’s order Court fees stamp is ₹ 10 and for Second Appeal before CST the court fees stamp is 5% of the amount in dispute, subject to minimum ₹ 50 and maximum ₹ 500.

Important Circulars

1. Services of optional nature rendered by a hotelier to the customers whether part of “Luxury provided in a Hotel” under Luxury Tax Act of 1987 (LXT-1088/14/ADM-3 dated 20-5-1988, Circular No. 18 of 1988).
2. Amendment to the Maharashtra Tax on Luxuries (in Hotels and Lodging Houses) Act, 1987. (LXT- 1190/Adm-7/21/B-1103 dated 4-1-1990. Circular No. 16 of 1990).
3. Luxury Tax on Tobacco (1093/BA06/Adm-3 Circular No. 5 of 1993 dated 5-5-1993. 40 STR 113).
4. Amendment to the Maharashtra Tax on Luxuries Act, 1987, changes in the slabs of receipts of charges for luxuries provided in hotels (LXT- 1094/Adm-7/27/B-283 Circular No. 3T of 1995 dated 13-2-1995-41 STR 210).
5. Amendment to the Maharashtra Tax on Luxuries Act,1987 — changes in the slabs of receipts of charges for luxuries provided in a hotel. (LXT- 1094/Adm-7/27/B-555 Circular No. 6T of 1995 dated 5-4-1995-42 STR 7).
6. Amendment to Maharashtra Tax on Luxuries Act, 1987— Levy of tax on Tobacco and related provisions. (LXT-1195/Adm-7/4/B-1146 Circular No. 24-T of 1995 dated 8-11-1995).
7. Change in rate of tax and Schedule (Adm- 1097/1/Adm-3 Circular No. 10-T of 1997 dated 3-6-1997, 44 STR 99).
8. Hoteliers charging composite sum for lodging & boarding (Circular No. 18-T of 2000 dated 
   22-5-2000).
9. Amendments w.e.f. 1-5-2001 (Circular No. 3-T of 2001 dated 16-4-2001).
10. Reduction of tax to 6% for 1-5-2002 to 
    30-4-2003 for turnover of receipts over ₹ 1,200/- per day per residential accommodation for hoteliers. (Circular No. 14-T of 2001 dated 
    17-5-2002).
11. Taxation of Tobacconist and Textile Traders in light of judgment of Godfrey Philips India Ltd. (139 STC 537) (SC) (Circular Nos. 16A of 2005 dated 9-8-2005 & 21-T of 2005 dated 
    23-9-2005).
12. Amendments effected videMaharashtra Act XXXII of 2006, Circular No. 23T of 2006 dated. 11-9-2006.
13. Luxury Tax in respect of Tobacconists and Textile Traders (No. LXT-2005/Adm-7/19/B-192 16A of 2005 dated 9-8-2005).
14. Levy of Luxury Tax on Luxury provided to the officials and employees of consulates of different countries (No. LXT-2005/Adm-7/9/B-197 17-T of 2005 dated 17-8-2005).
15. Luxury Tax in respect of Tobacconist and Textile Traders (No. LXT-2005/Adm-7/19/B 21-T of 2005 dated 23-9-2005).
16. Clarification on certain aspects in respect of levy of luxury tax (No. LXT-2005/Adm-7/21/B 20-T of 2005 dated 23-9-2005).
17. Extension for reduction of tax from 10% to 6% for a period from 1-5-2004 to 30-4-2005 (No. LTR-2009/1/Adm-29/B-139, 11-T of 2009 dated 25-3-2009).
18. Amendments effected videMaharashtra Act No. XII of 2010, Circular No. 17-T dated 17-5-2010.
19. Providing e-payment facility for Profession Tax, Luxury Tax and Sugurcane Purchase Tax through GRAS. Circular No. 16-T of 2014 dated 
    17-9-2014.
20. Procedure for submission of returns under Luxury Tax Act after making payment through GRAS. Circular No. 3-T of 2015 dated 20-2-2015.
21. Procedure for enrolment for filing e-Returns for dealers registered under Luxury Tax Act. Circular No. 1-T of 2016 dated 1-1-2016.

Gist of Important Judgments

1. Godfrey Philips India Ltd. vs. State of Uttar Pradesh: (2005-139 STC 537) (SC).

‘Luxuries’ means an activity of enjoyment of or indulgence in that which is costly or which is generally recognised as being beyond the necessary requirements of an average member of the society. It does not mean articles of luxury.

2. M/s. North Point Training and Research Pvt. Ltd.: DDQ. No. 11/2003/ Adm-5/19/B-1 dated 
   20-2-2007.

Institution conducting various management programmes and providing accommodation to students and delegates is a hotelier liable to pay tax u/s. 3 of Maharashtra Luxury Tax Act, 1987.