Charges and rate of tax

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1. (1) The tax payable by a hotelier or proprietor under this Act shall be charged at the following rates, namely:
   • (a) In case of a hotelier 10 per cent of the turnover;
   • (b) In case of a proprietor, --
     • (i) on luxuries, other than those provided in a hotel, 10 per cent of the turnover;
     • (ii) on advertisements, 10 per cent of the turnover;
     • (iii) on entertainment, 20 per cent of the turnover.
2. (2) Where, in addition to the charges for luxury provided in a hotel, service charges are levied and appropriated by the hotelier and not paid to the staff, then such charges shall be deemed to be the part of the charges for luxury provided in the Hotel.
3. (3) The tax shall be levied and collected at the rate specified in clause
   • (a) of sub-section (1), on the charges actually paid to the hotelier for such luxury.
4. (4) The tax shall not be levied and payable in respect of the turnover for supply of food and drinks, where they are separately charged for and on the sale of which the hotelier or the proprietor is liable to pay tax under the Madhya Pradesh Vat Act, 2002 (No. 20 of 2002).