Air-conditioned bars and permit rooms mull hiking cover charges, in wake of 10.3 per cent service tax and increased liquor prices proposed by Budget 2011
Air-conditioned bars and permit rooms mull hiking cover charges, in wake ofu00a010.3 per cent service tax and increased liquor prices proposed by Budget 2011
Partying this Sunday night, and every weekend after that, may dent your pockets more than ever before. City pub owners are contemplating increasing cover charges from May 1, as air-conditioned permit rooms across the city impose the 10.3 per cent service tax on your bill of liquor, the price for which has already separately been appreciated. 
Party poopper: To cope with the additional tax on AC bars, some are
electing to get rid of the air-conditioning. Represention Pic
While few permit rooms are opting to get rid of the of the air conditioner, others are reworking the menu, to display the new improved liquor rates, that will have you paying 30 to 50 per cent more overall on the booze. Still others say they will have to increase the cover to cope with the additional tax, industry sources said.u00a0
Sadhna Lalwani, owner of Hawaiian Shack, the retro-rock playing pub in Bandra, said, "We will have to increase the cover charge. But we have opted for wait-and-watch policy for now. We are waiting for the final prices to come out in the market after which we will take a final call. We're worried that the hike will affect footfalls. Liquor is served like water abroad but in Mumbai it seems to be a practice of the wealthy, who can afford drinks at such a high price."u00a0
She added, "The government should have thought twice before increasing the prices and taxes on liquor. It may face losses as well. "u00a0 MiD DAY had earlier reported ('Eateries lose their cool over A/C tax', April 18) that many restaurants in the city are planning to forgo the AC, thanks to the 10.3 per cent service tax on air-conditioned restaurants serving liquor.
Others, however, may abolish the cover charge altogether for a while, until things become clearer. That does not mean you will pay less for the liquor because those rates have shot up across the board. Another Bandra pub owner, who did not wish to be named, said, "We are planning to stop charging cover charges as companies have stopped giving free and discount offers. We don't want customers to feel burdened, as they are already liable to pay the 10.3 service tax on their bill. Already liquor price has increased and if we keep the cover charge mandatorily it will be a loss to us," he said.
In this case, however, the pub owners will end up footing the extra expenses. Sudhashu Kumar Singh, director, Ramee Group of Hotels, who owns the Irish Pub at Khar, and Rock Bottom at Juhu where they have a cover of Rs 2,000 for stag entry and Rs 2,500 for a couple, said, "For now, we have decided to absorb the cost, as increasing the cover charge suddenly to a high price will be difficult. It might get unaffordable for guests.
We might have to reduce our profit margin to make up for the current expenditure. We are waiting for the final rate card and will hike accordingly." Singh grumbled that a 50 per cent hike in liquor prices would mount losses for the hospitality industry.
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