Home / Budget / Budget Expectations /  Budget: Hotels seek simplification of taxes, licence procedures for a revival
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NEW DELHI : The hospitality industry has urged the Centre to consider waiving licence fees, lowering power tariffs and property taxes, and reducing interest rate on borrowings, to help the industry chart a revival following the third wave of covid-19 infections.

As part of the Budget expectations, the industry has also demanded an infrastructure status for hotel projects under 200 crore. Many associations representing the interests of hospitality businesses said it is critical to protect the industry hit by the pandemic.

“The support required from the Centre at this time cannot be emphasized enough. Policy interventions are imperative for the sector’s survival and its early and quick rebound to normalcy," said the Hotel Association of India (HAI) in a statement.

According to hotel owners, infrastructure status will help resolve several issues faced by hotels and hospitality companies. While the infrastructure industry status is available to hotel projects of over 200 crore, small hotel projects do not enjoy the benefits.

HAI said the sector’s cascading effect on the economy is well documented. “An infrastructure status will also enable hotels to avail benefits of lower taxation, utility tariffs and simplified approval process for projects," it added.

Industry body Assocham said the government must also endorse ease-of-doing business by establishing a single-window clearance for licences and approvals for new hotels.

According to existing laws, about 100 approvals, including 20 licences, are required to set up a hotel, from the ministry of tourism, food safety and standards authority of India, the fire department, pollution control board, municipalities, the police and labour department, among others.

“Delay in receiving licences defers a hotel’s launch which further stresses cash flows and project funding for hotel projects. If there was a single-window clearance mechanism in all states it will enable ease-of-doing business for new hotels and bring in transparency and accord speedy approval," said Kush Kapoor, the chairman of National Tourism and Hospitality Council at Assocham, and the chief executive officer of Roseate Hotels and Resorts. He said the tax structure must also be simplified for the hotels industry.

According to Manbeer Choudhary, chairman and managing director, Jewels Group of Hotels, which runs luxury heritage hotel brand, Noor Mahal Palace in Haryana, the industry is not only looking for relief and support, but also reforms and special packages to help the industry survive. “There is a dire need to reconsider restrictions imposed every time when a pandemic wave comes. This time we need more protection and backing to stay afloat," he added.

Hotel owners are also asking for reconsidering goods and services tax (GST) rates that currently stand at 18% for room tariffs of above 7,501 and 12% for rooms available for 1,000-7,500.

“Revisiting the GST structure to reduce complexities will be a welcome move. Varied rates for different products and services create confusion. Also, easier loan facilities for MSMEs and subsidies would aid the recovery in domestic businesses," Choudhary said.

Vineet Verma, executive director and CEO of Brigade Hospitality, which runs 10 hotels including Sheraton Grand Bangalore and Holiday Inn Chennai OMR, said the impact of the pandemic on hospitality and tourism has been widespread and expected to be long-lasting. “While both the Centre and state governments have tried to extend support to some extent, the sectors need more long-term resuscitation measures to get back on track," he added.


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