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FHRAI demands Industry & Infrastructure status for Hospitality Industry

Demands uniformity 12% GST for hotel industry

Tuesday, January 16, 2018, 09:15 Hrs  [IST]
HBI Staff|New Delhi

Federation of Hotel & Restaurant Associations of India (FHRAI), the apex body for Hotels & Restaurants in the country, in its pre-budget memorandum to the government has asked for Infrastructure & Industry status for the Hospitality Industry for projects of INR 25 Crores and more.

 FHRAI has also asked the Government to keep GST rates at uniform 12% on all the categories as a lower rate of 12% will contribute to increase Nation’s GDP, encourage tourism induced employment, across the country. Currently, there are four rates for hotels (0%,12%, 18% and 28%) based on the declared tariff of rooms 

Garish Oberoi, President, FHRAI said, “The tourism sector suffers from a gap in terms of world-class infrastructure development in the country’s tourism destinations. This gap can be bridged by encouraging investments in hotel sector by giving infrastructure status for lower investments. Also no other nation has GST rate as high as 28% on hotels and tourism. Charging different tax rates on the nature of accommodation and destination may escalate a perception that India is not a tourist friendly nation”.

 Since there are restrictions in place for hotels to be constructed near the beaches and coast lines FHRAI also recommends permission of construction of hotels, however, mandate may be given to hotels to ensure that the requisite environmental and safety norms etc are adequately taken care of. 

The memorandum also asks the government to treat all foreign exchange earnings as exports or deemed exports; make make transaction value as the basis of rate categorisation and not declared tariff, restoration of input credits for restaurant industry, among others.

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