Hospitality sector demands uniform status, cut in GST, long-term loan facility

The industry associations have demanded uniform GST at 12% across all hotel categories and room tariffs across the country and also a waiver in Minimum Alternate Tax for two years from April 2023 to March 2025.

India’s tourism and hospitality sectors, which have been currently witnessing a market recovery post the COVID-19 pandemic, are awaiting a slew of positive signs, including the implementation of a uniform status for the industry, rationalisation of GST, other reliefs and incentives, a more robust and efficient single window clearance mechanism and provisions for long-term loan, from Union Budget 2023-24.

The industry associations have demanded uniform GST at 12% across all hotel categories and room tariffs across the country and also a waiver in Minimum Alternate Tax for two years from April 2023 to March 2025.

The hospitality industry has been demanding the government to provide it with a uniform industry status across the country to help the sector grow further, said Chander K. Baljee, Chairman & Managing Director, Royal Orchid & Regenta Hotels.

“We request the Finance Ministry to provide us with long-term loans. Internationally, hotel loans are 15 to 25 years, considering the huge gestation period. A similar structure should be implemented across the Indian hospitality industry and under such system hoteliers won’t go through distress and the banks also won’t encounter NPAs," suggested Mr. Baljee.

The sector’s long-standing request for industry and infrastructure lending status, regardless of project cost, is first and foremost on industry’s wish list, as it will help boost investment and incentivise hotel development, particularly in several off-beat leisure destinations and tier 2 and 3 cities across the country, as per Mandeep S. Lamba, President (South Asia), HVS ANAROCK.

“Additionally, enhancing the ease of doing business in the sector through online single window clearances and lowering the GST rate on hotel tariffs are the much-awaited announcements that will aid the sector’s growth momentum," Mr. Lamba added.

Vineet Verma, Director, Brigade Hospitality said, “The Hospitality and Tourism sector, which is gradually returning to pre-pandemic levels and beyond, could well do with a push from the government in the form of policy and incentives for the faster growth of the sector. While some measures have been rolled out, a lot more is required for consistent growth."

Jai Sreedhar, the Joint Managing Director and CEO of Rosetta-Sakleshpur, a luxury accommodation in Karnataka said, “The currently existing 18% GST slab discourages promotion of tourism and is not a sustainable option due to high overhead costs. We are hoping that the government recognises our industry’s contribution to GDP and helps us with a lower tax slab.”

Multiple bodies that represent the industry have also been demanding the increase of ECLGS (Emergency Credit Line Guarantee Scheme) loan term for the hospitality sector for the maximum period from the existing six years.