India’s hospitality industry anticipates infrastructure status to lower financing costs, rationalisation of goods and service tax (GST) rates to stay competitive with global peers, a digital single-window clearance system for hotel licences and approvals, and measures for increasing the skilled workforce.Industry stakeholders believe that the full potential of India’s travel and tourism sectors remains untapped. This issue becomes a key focus as India faces a considerable shortage of hotel rooms compared to its global peers.
“The hospitality industry expects the government to grant infrastructure status to hotel and convention centre projects costing Rs 10 crore or more,” said Pradeep Shetty, spokesperson for the Hotel and Restaurant Association (Western India) and vice-president of the Federation of Hotel & Restaurant Associations of India.
Shetty further added that granting industry status and allied benefits to the hospitality sector across the country will amplify the growth of the sector. Such initiatives would help India achieve its vision of becoming a $1 trillion tourism economy by 2047, generating employment and foreign exchange earnings.
According to K B Kachru, president of the Hotel Association of India (HAI) and chairman of South Asia at Radisson Hotel Group, growth in hotel room inventory should be the priority, at least to balance demand and supply challenges. “If we have to achieve 2047 goals, we essentially need international investments.”
Both Shetty and Kachru added that this will provide long-term financing at affordable rates and support small and medium-sized ventures substantially.
Another key aspect the industry anticipates is the rationalisation of GST for hotels and restaurants, along with a lower GST rate on MICE (an acronym for meetings, incentives, conferences, and exhibitions) for international segments and tourists.
According to HAI, reducing the 18 per cent GST on hotel rooms above Rs 7,500 to 12 per cent will help boost India’s hospitality sector and attract a greater number of international visitors to the country while maintaining a competitive edge over other Asian countries.
Additionally, GST rates for hotel restaurants should be reduced to 12 per cent with full input tax credit (ITC). This will make them competitive compared to standalone restaurants that enjoy a GST rate of 5 per cent without ITC.
Source: Business Standard
