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    CII National Committee writes to tourism minister seeking opening of hotels across states, tax roll back

    Synopsis

    Requesting the minister to advise all state governments to allow hotels to operate as per Unlock 3.0 MHA guidelines, making loans more accessible and seeking a 12 months deferment of statutory dues, the letter dated August 13 said budget 2020 proposed a new TDS levy similar to TCS under GST law, whereby travel agents and OTAs are required to withhold 1-5% TDS while remitting payments to hotels and airlines.

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    NEW DELHI: Indian Hotels Company (IHCL) CEO Puneet Chhatwal, chairman of CII's national committee on tourism and hospitality and MakeMyTrip Group executive chairman Deep Kalra, co chairman of the committee have written to tourism minister Prahlad Patel seeking opening of hotels in all states, policy support and a rollback of some tax proposals introduced this year.

    “It is imperative that the tourism and hospitality industry reopens following Unlock 3.0 in the country,” said Chhatwal and added that CII has reached out to ministry of tourism at the centre and Anil Baijal, LG, Delhi government for support during these ‘unprecedented times.’

    Requesting the minister to advise all state governments to allow hotels to operate as per Unlock 3.0 MHA guidelines, making loans more accessible and seeking a 12 months deferment of statutory dues, the letter dated August 13 said budget 2020 proposed a new TDS levy similar to TCS under GST law, whereby travel agents and OTAs are required to withhold 1-5% TDS while remitting payments to hotels and airlines. "Keeping in with the fact that the entire industry is heading for a loss this year, the proposed provision should be rolled back,” the letter stated and added: “Proposed TCS on sale of overseas packages in Finance Bill 2020 is detrimental to tourism business in India. Proposed TCS will not only increase the cost of packages sold by Indian tour operators, it will also shift all sales of outbound tourism to overseas suppliers, denying the govermment income tax and GST revenue...proposed TCS should be rolled back.”

    The industry leaders have also sought restrictions on the size of large public gatherings, congregations for conferences, marriages etc to be based on size of banquet halls and not number of people (current guidelines cap marriage related gatherings at 50 people), and have suggested measures like making e visas free or providing them at a nominal cost till December 2021, changes in LTA rules, zero rating GST for MICE, zero rating GST for bookings made on domestic travel for two years to boost domestic tourism. They have also highlighted Covid testing protocols that could be followed for safe international and domestic travel.

    “As per current rules, LTA can be claimed for travel fare or tickets within India only, expenses incurred for accommodation, or any other fee will not be eligible for exemption. To incentivize domestic tourism, government may modify the rules and allow citizens to avail LTA benefit on domestic tours including travel fare or tickets and accommodation for a period of two years,” the latter stated.

    Investments in the hotel sector can also be encouraged by giving infrastructure status for lower investments, according to the leaders. “The government has granted infrastructure status to hotel projects above Rs 200 crore...If mid-market hotel projects under Rs 200 crore are granted infrastructure status and have longer tenure to repay loan, they will be profitable,” the letter stated.
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    1 Comment on this Story

    Kochar Bipin66 days ago
    Reasonable recommendations - the Government should quickly act on these to protect the millions of jobs in this sector
    The Economic Times