Since no economic stimulus package has been announced for the hospitality and tourism sectors, which have been badly affected, industry associations are demanding Sops from the government to keep the sector alive. The only deadline for the sector was the recently amended Emergency Credit Line Guarantee Scheme (ECLGS) 3.0. The Treasury Department recently removed the cap from £On February 29, 2020, there were 500 crore loans outstanding in order to be eligible for the system loan. Now a greater number of hotel companies will be able to take advantage of the program, which is subject to a maximum additional ECLGS support for each borrower capped at 40% or Rs. 200 crore, whichever is lower .

“It is a timely step, but much more needs to be done for the sector,” said Patu Keswani, Executive Committee member and Treasurer of the Hotel Association of India (HAI) & Chairman and CEO of Lemon Tree Hotels Ltd.

HAI had previously issued statements to the Prime Minister and the Treasury Department asking for relief in key areas, including one-time loan settlement and waiver of all legal liabilities (property tax / lease rent / license fee / excise tax) at center, state and municipal levels for the pandemic period, stimulus package to subsidize the salaries of hotel employees.

At the recently concluded May 28th GST Council meeting, the hospitality and travel sector, which advocated tax rationalization, received no concessions.

In addition to lowering GST rates on hotel bookings, the FHRAI has requested that GST be removed from rental payments for players who are not eligible to apply for input tax credit, and to allow hospitality businesses to refund unused GST credits from state governments. It has also made several statements to urge the Treasury Department and the Reserve Bank of India to take the policies needed to assist the industry in its survival efforts.

“The GST Council meeting had no mention of the precarious situation of the tourism and hospitality sector in the country,” said Gurbaxish Singh Kohli, Vice President of FHRAI We put our hopes on the Treasury’s stimulus package announcement and pray that this does justice to our industry. “

Total sales in the hotel industry fell by around 75% in the last financial year. The industry saw sales decline nearly Rs.130 billion in fiscal 2020-21.

The Indian Association of Tour Operators (IATO), which represents more than 1,600 tour operators for incoming tourists, said it was crucial to lower taxes for the tourism industry as it would face fierce competition from neighboring countries that are the best Offer deals to international customers to attract tourists.

The industry association has asked the GST Council to only tax the service fee at 10% instead of taxing the entire cost of the tour package. It has also indicated that GST / IGST can be completely exempt from the services provided outside India including neighboring countries even if the package includes India tour.

“As long as we do not lower taxes on tourism products, we cannot compete with South Asia and other neighboring countries because the tourism tax in these countries is very low compared to our country,” said Rajiv Mehra, President of IATO.

With the strong Covid-19 wave in India, inbound tourism has remained restricted for the past 14 months and several countries have imposed travel bans on India.

Subscribe to something As good as new newsletter

* * Please enter a valid email address

* * Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and up to date with Mint.
Download
our app now !!

RELATED ARTICLESMORE FROM AUTHOR