Hospitality sector seeks infra status
Vijay C Roy
Chandigarh, July 20
The hospitality sector is currently on the upswing. The growth is driven by couple of factors such as favourable demographics, robust domestic demand and increased investments. To further boost the sector, the industry is pinning hopes on the Union Budget 2024-25 and expects the government will announce favourable steps to boost the segment.
Better connectivity needed
The hotel and tourism sectors have been among the key growth segments of the economy. Besides seeking the infrastructure status ahead of the Budget, the hospitality sector wants better infrastructure and connectivity. CareEdge Ratings has also called for according the infrastructure status to the hotel industry and the industry status for the travel and tourism sector. It will help in the regularisation of policies and processes and better access to finance.
Demand for uniform GST
The industry expects rationalisation of GST rates across all segments in the Budget. “The government should consider a uniform GST rate of 12 per cent on hotels in the Budget. The existing tiered structure leads to price disparity as hotels adjust room rates based on demand and peak season. The move will not only provide respite, but also simplify compliance giving a much-needed boost to the inbound and domestic sector, especially in the hills,” said Sandeep Sahni, president, Hospitality and Restaurant Association of Uttaranchal.
TCS standardisation
The government’s continued efforts to enhance infrastructure, including new airports and expanded transportation networks, alongside developing religious circuits and lesser-known attractions, are pivotal for national growth and future-proofing the tourism sector. “We also believe that the standardisation of tax collected at source (TCS) at five per cent on foreign travel packages should be considered, against the current five per cent and 20 per cent slabs. This is hampering our business as customers prefer to use alternate channels that are outside the domestic tax net,” said Amit Jain, founder, Magicfares.
Single-window clearance
The industry has called for streamlining the licensing process by implementing a single-window system for all approvals and equalising regulations for online travel agencies. By addressing the key areas, the Budget can provide the much-needed impetus to the real estate sector, ensuring sustainable growth and development across all segments.
Changes in LTA rules
The industry believes the Budget should modify the Leave Travel Allowance (LTA) rules to include the amount spent on hotel stays to be considered as an LTA expense. Further, corporates should be offered incentives for organising meetings and conferences in India through partial or full tax exemptions on the expenses incurred, thereby boosting domestic travel and tourism. Incentives for hotels, resorts and travel agencies are also needed to promote local destinations.
