‘Hospitality is not a sin industry’

Surendra Kumar Jaiswal - We too serve the nation

‘Hospitality is not a sin industry’

FHRAI calls for GST reliefs, industry status

In a pre-poll plea, FHRAI requested all parties to policy reforms to help the hospitality sector revive and survive

NEW DELHI, Feb 17 (The CONNECT) - With Assembly elections underway in the State, the Federation of Hotel & Restaurant Associations of India (FHRAI) has submitted representations to Punjab Chief Minister Charanjit Singh Channi and various political party heads requesting policy reforms for the survival and growth of the hospitality industry in the State.

The memoranda were submitted to president of the Bhartiya Janta Party - Ashwani Sharma; president of the Aam Aadmi Party - Bhagwant Mann and the president of the Shiromani Akali Dal - Shri Sukhbir Singh Badal. The Association has appealed for an environment that facilitates the survival and revival of the hospitality sector in the State by implementing the requisite policy measures by the new Government.

“The State of Punjab has always been a preferred tourist destination in the country and accordingly, has been a favoured location for the hospitality sector as well. Many renowned hospitality groups have been operating businesses across cities, while many others are eyeing to make an investment in the State,” FHRAI said.

The federation pointed out that today the hospitality industry is facing an existential crisis across the country, including in the Punjab. It, therefore, requested the Government for bringing in some much-needed policy reforms for our industry.

Among these, the foremost request is that the liquor license fee be reduced by 50 per cent for all categories of hotels and restaurants for next 5 years to support the recovery of industry in the State. The current license fee of INR 5 lakh per year for 5-star hotels is too high in the context of the pandemic.

The FHRAI also said “we also request that the VAT on sale of liquor in hotels and restaurants be reduced to 7 per cent from existing rate of 14.41 per cent.” Pointing out that power constitutes a significant operational cost for all hotels and restaurants, the federation said for the industry to recover losses incurred by it during the pandemic, Surendra Kumar Jaiswal, Vice President-FHRAI, said it would help if the tariff for the sector were revised from the existing tariff of INR 6.91/KWH to INR 5/KWH.

FHRAI has also requested for direct international flights from Mohali International Airport to countries like Canada, USA and Singapore, among others for improved air connection for the millions of Punjabis living in these countries.

“Facilitating international flights from Mohali will not only be beneficial for the residents of the State and its people living abroad, but it will also give a strong boost to the tourism sector,” Jaiswal said.

Other than these, he said, the State Government needs to facilitate adequate and organized municipal services and infrastructure to hospitality sector. Proper access or approach roads with signage and door-to-door garbage collection facility are some very basic requirements. More importantly, the number of statutory and regulatory compliances including licenses, certificates, permissions and NOCs required for hospitality projects need to be rationalized and reduced, he added.

Hotel projects being highly capital-intensive with land costs being a major component of investment. FHRAI, hence, has asked the Government to provide land at subsidized rates and accord industry status to the sector so that the business can take advantage of concessions.

“Offering land at subsidized rates will play a pivotal role in attracting new and prospective investors to the sector which has the potential of highest multiplier effects on job creation. Also, it is imperative that investment subsidies and tax holidays are granted for investments in State Tourism Promotion Zones  and other related projects implemented in the State.

The federation requested for an industry status to the hospitality industry with a simple web-based registration process on the lines of the Udyam Registration of MSME. The eligibility for the industry status can be based on hotels with valid licenses, statutory registration such as GSTIN.

India is facing tough competition from neighbouring destinations, especially due to the higher rate of GST here. Hospitality Industry should not be treated as a 'Sin Industry' and the GST rates on room tariffs should be reduced and Input Tax Credit (ITC) permitted for GST charged on food, Jaiswal said.

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