Tamil Nadu Tax on Luxuries (Amendment) Ordinance, 2013
The Governor of Tamil Nadu promulgated Tamil Nadu Ordinance No. 2 of 2013, the Tamil Nadu Tax on Luxuries (Amendment) Ordinance, 2013, on 1 July 2013, and the Law Department, Government of Tamil Nadu, published it in the Tamil Nadu Government Gazette Extraordinary on 4 July 2013. It immediately amended the Tamil Nadu Tax on Luxuries Act, 1981 by raising the minimum hotel room charge covered by luxury tax, revising the tax rates and raising the hotel registration threshold. It affects hotels charging at least five hundred rupees per room per day and people occupying those rooms.
What the Ordinance does
The Tamil Nadu Tax on Luxuries (Amendment) Ordinance, 2013 changes the taxation and registration rules applying to hotels under the Tamil Nadu Tax on Luxuries Act, 1981. The Governor of Tamil Nadu promulgated Tamil Nadu Ordinance No. 2 of 2013 on 1 July 2013 because the Legislative Assembly was not in session and immediate action was considered necessary. It came into force at once.
The Law Department, Government of Tamil Nadu, stated that the earlier minimum room charge had been fixed more than a decade previously. The change was intended to benefit poor and middle class people by raising the minimum charge at which hotel accommodation became subject to luxury tax.
Luxury tax thresholds and rates
Tamil Nadu Ordinance No. 2 of 2013 makes the following changes to tax on occupied hotel rooms:
- The minimum room charge covered by the definition was increased from two hundred rupees to five hundred rupees.
- Where accommodation costs at least five hundred rupees but less than one thousand rupees per room per day, luxury tax is ten per cent of the room rate.
- Where accommodation costs one thousand rupees or more per room per day, luxury tax is twelve and a half per cent of the room rate.
- The tax applies to luxury provided in a hotel for every room occupied by a person, subject to the Tamil Nadu Tax on Luxuries Act, 1981.
Hotel registration
The Tamil Nadu Tax on Luxuries (Amendment) Ordinance, 2013 increases the hotel registration threshold from one hundred rupees to five hundred rupees. The explanatory statement says that registration is required only for hotels charging not less than five hundred rupees per room per day for accommodation.
Who may be affected
Tamil Nadu Ordinance No. 2 of 2013 directly concerns hotel operators whose room charges meet the revised threshold. Hotel guests occupying rooms charged at five hundred rupees or more per day may also encounter the prescribed luxury tax. The Ordinance deals with hotel accommodation taxation and registration, not land ownership, property title or land records.
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Common questions
Is a hotel room costing less than five hundred rupees per day covered by these luxury tax rates?
The Ordinance sets the minimum covered room charge at five hundred rupees per room per day. The listed luxury tax rates begin at that amount.
What is the luxury tax on a room costing between five hundred and one thousand rupees per day?
For a room rate of at least five hundred rupees but less than one thousand rupees per day, the tax is ten per cent of the room rate.
What is the luxury tax when the room rate is one thousand rupees or more?
The tax is twelve and a half per cent of the room rate when accommodation costs one thousand rupees or more per room per day.
Does every hotel have to register under the amended requirement?
The explanatory statement says registration is required only for hotels charging at least five hundred rupees per room per day for accommodation.
