Union budget: HRAO seeks industry status for hotels

BHUBANESWAR: Ahead of the Union Budget, the Hotel and Restaurant Association of Odisha (HRAO) has urged the Union Finance Minister Nirmala Sitharaman to declare tourism as a priority sector and provide it with a uniform industry status across the country.

In a letter on budget suggestions for tourism and hospital ity sector to the minister on Saturday, the HRAO chairman JK Mohanty said that the industry status will help the industry get long term funds at suitable interest rates to attract private capital hospitality, to create all India jobs and build quality accommodation supply.

Currently, hotels built with an investment of Rs 200 crore or more have been accorded infrastructure status. “This threshold should be brought down to Rs 10 crore per hotel to give a fillip to the budget segment hotels. This will enable hotels to avail term loans at lower rates of interest and also have a longer repayment period,” he suggested.

Mohanty said hotels should be charged power rates as applicable to industries and GST rates on hospitality should be slashed. “The rooms with tariff of Rs 7,500 and above attract a GST of 18 per cent and with tariff between Rs 1,001 and Rs 7,500 are taxed at 12 per cent. An 18 per cent GST is still high in this competitive scenario, we are expecting an uniform GST at 12 per cent across all hotel categories and room tariffs, from the budget,” he added.

Among other things, the association’s suggestions include relaxations in Minimum Alternate Tax (MAT) by allowing a waiver on it for two years from April 2023 to March 2025 for survival and growth of the tourism sector post Covid. Besides, it is also demanding restoration of the benefits to hotels under the Service Exports from India Scheme (SEIS) for at least five years beyond 2019-20 and maintaining hotel reward points under the scheme at five per cent.

“Prime Minister Narendra Modi has been openly announcing that tourism is the priority of Government of India but the same is not followed by the government machinery down the level. Even the banks are declared hospitality and tourism sector as a high-risk sector and promoters/entrepreneurs are finding it difficult to get finance as per requirement of industry,” said Mohanty who is also the chairman of IATO eastern region.