PESHAWAR, Nov 23: Despite an unchecked, mushroom growth of hotels, resthouses and restaurants in the picturesque Provincially Administered Tribal Areas (Pata), the government has failed to extend the general sales tax (GST) on services there.

Officials believe that the national exchequer is losing huge revenue each year in the form of General Sales Tax on services due to non-extension of Hotel and Restaurant Act, 1976, and its Rules 1977 to the Pata, one of the main tourist attractions of the country.

Officials of the tourism department told Dawn here on Saturday that the federal government had been requested time and again to extend the Act to the now defunct Malakand division to improve its revenue base.

The defunct Malakand division, comprising Chitral, Upper Dir, Lower Dir, Swat, Shangla and Buner districts apart from the provincially administered Malakand agency, covered one third of the total area of the NWFP.

Pata has more than 300 unregistered hotels and restaurants of different categories like one, two and three stars, entertaining hundreds of thousands domestic and foreign tourists every year.

A number of travel agencies and tourist operation centres are being run in the area, enjoying exemption from all taxes.

Other than Pata, the government has registered 160 hotels and restaurants, 213 travel agencies and 113 tour operators in the province.

Under the act, the government charges GST on services, Rs500 as registration fee, Rs250 licence fee and levy bed tax, ranging between Rs50 and Rs200 per annum. Similarly, the government also collects taxes from travel agencies and tourist operators in the form of excise duty.

“The extension of the Act to Pata will not only generate huge amount of revenue to the public sector, but also improve services for domestic and foreign tourists,” said officials of the Sarhad Tourism Development Corporation.

Officials said that despite exemption from the GST and excise duties, local hoteliers had failed to provide quality service and facilities to visitors that also left a negative mark on the tourism sector.