The Federation of Hotel and Restaurant Associations of India (FHRAI) recently held pre-budget talks with Finance Minister Nirmala Sitharaman to discuss key reforms needed in the tourism and hospitality sector. The meeting highlighted several areas that need urgent attention in order to boost the growth of the industry and make India a more attractive destination for both domestic and international tourists.
One of the main issues discussed during the meeting was the need for a reduction in GST rates for hotels and restaurants. Currently, hotels with a tariff of Rs. 7,500 and above are taxed at 18%, while those with a tariff below Rs. 7,500 are taxed at 12%. The FHRAI has been advocating for a uniform GST rate of 12% for all hotels, regardless of their tariff, in order to make accommodation more affordable for travelers.
Another key reform highlighted by the FHRAI is the need for a single-window clearance system for hotel projects. The current process of obtaining various approvals and licenses from different government departments is cumbersome and time-consuming, leading to delays in the completion of hotel projects. A single-window clearance system would streamline the process and make it easier for hoteliers to set up new properties, thereby boosting investment in the sector.
The FHRAI also called for a reduction in the license fees and taxes imposed on hotels and restaurants. The high cost of licenses and taxes is a major burden on small and medium-sized businesses in the sector, and reducing these fees would help in promoting entrepreneurship and job creation in the industry.
In addition, the FHRAI emphasized the need for infrastructure development in tourist destinations. Many popular tourist spots in India lack basic amenities such as roads, water supply, and sanitation facilities, which hinders the overall tourist experience. Improving infrastructure in these areas would not only attract more visitors but also create employment opportunities for locals.
Overall, the pre-budget talks between the FHRAI and Finance Minister Sitharaman highlighted the urgent need for reforms in the tourism and hospitality sector in order to spur growth and make India a more competitive destination on the global stage. The government is expected to take these recommendations into consideration while formulating the upcoming budget, and it is hoped that concrete steps will be taken to address the concerns of the industry and pave the way for a brighter future for tourism in India.
