Kathmandu, March 7:

Hotel Association of Nepal (HAN) today expelled Tiger Tops, a resort in Chitwan, from its membership effective from February 14.

According to executive director Madhav Om Shrestha, the expulsion decision was taken following the resort’s unilateral move to announce the percentage on which the service tax would be charged without consulting either HAN or the other resorts of the area.

Service tax, it may be recalled, has been a bone of contention between the hotels and resorts of Chitwan under the aegis of HAN and the respective unions for some time now. According to an agreement signed by HAN and the different trade unions representing hotels, restaurants and wildlife resorts on December 30, it was decided to levy 10 per cent service charge on food and beverages, 68 per cent of which would go to the labour and the rest towards the maintenance and upkeep of the hotels. In January, however, even lodging and accommodation were included in the service tax net. But the labour unions have now been demanding that service charge be levied on the entire package, including activities like elephant safari, excursion tour, canoeing, among others.

The deadlock between hotels and the labour unions have resulted in the closure of resorts in Chitwan for over 15 days now. “Unlike hotels in Kathmandu, Chitwan hotels have to pay an additional tax to the government for allowing tourists to enter the wildlife national park,” Shrestha said.

According to a press release from HAN, the joint meeting of FNCCI, CNI and HAN had recently come up with the proposal of sending independent auditors to these hotels.