Budget 2019: Hospitality Industrys wish list from FM Nirmala Sitharaman

Budget 2019: As July 5th — the day when Finance Minister Nirmala Sitharam will present the maiden budget of the Modi 2.0 government — is a mere two days away, various industries have become vocal in regard to their expectations and demand from the Narendra Modi Government. The Hospitality industry is not an exception to it. From two options in GST for restaurants to ITC (input tax credit) issues, the hospitality industry has put forth its demand list for Finance Minister Nirmala Sitharaman on the Budget Day.

Speaking on the hospitality industry's demand from the Modi 2.0 Government Gurbaxish Singh Kohli, Vice President, FHRAI and President, Hotel and Restaurant Association of Western India (HRAWI) said, “Our request to the Government, to include two options in GST for restaurants is; a composite GST with flat 5 per cent rate under which restaurants will not avail ITC and the other option being 12 per cent rate with ITC. The choice of opting into either of the options should be with the establishment. Furthermore, GST on property rent should be abolished as this makes it unviable for establishments to sustain the high costs leading to many businesses closing down.,” adding, “Ever since the GST came into effect, we’ve been requesting for the rate categorization of hotel tariffs to be on the basis of the transaction value instead of on the declared tariff. Hotels presently are required to levy either 0 or 12 or 18 or 28 per cent GST rates based on the declared room tariffs. We recommend that the rate categorization is on the basis of transaction value instead and also that a uniform rate of 12 per cent be levied with Input Tax Credit being allowed for this infrastructure industry. We have also requested for GST exemption or a GST refund for their purchases made in India when foreign tourists return home. Tourists will be able to claim a tax refund at the airport at the departure and this will help increase the foreign exchange earnings for the country.” 

Sandeep Gupta, Executive Director, Asian Hotels West Limited said, "The hospitality and tourism is one of the fastest growing sectors in India and it has the potential to expand by 2.5 per cent with higher budgetary allocation. The employment opportunities are expected to rise by 2% each year to 52.3 million jobs by 2028. While the hospitality sector is expecting better policies and tax reforms, keeping in mind the primary GST rate of 28% on luxury hotels. The high percentage has made the star category hotels in Indian cities the most taxed in the world. By rationalised changes, one may standardise the luxury segment and making India a competition ready with an increase in demand. This would also result in India’s positioning as one of the chosen destinations, enabling the foreign exchange value for the nation."