The government has implemented a two percent luxury tax on specific services and goods. This decision, announced in the budget for the fiscal year 2023-24 presented on May 29, has now come into effect from July 17.
The luxury tax will be applicable to high-end hotels and resorts offering services and imported liquors and precious metals. Four and five-star hotels and resorts will now charge an additional two percent to their clients for the services provided, starting from mid-July.
The tax will be imposed on precious metal and stone ornaments, including gold, diamonds, pearls, and gems, valued at over Rs 1 million. For imported alcoholic products, the tax will be levied at the customs point during transportation.
Failure to pay the luxury tax will result in the tax amount being recovered along with a 15 percent annual interest rate. Additionally, individuals or entities responsible for paying the luxury tax are required to submit a statement related to the tax. Failure to submit the statement will result in a fine of 2.5 percent annually until the details are provided.
The implementation of the luxury tax aims to generate revenue for the government and regulate the luxury goods and services sector.