Budget 2022: what the hotel sector affected by covid expects from the government

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The hospitality industry, which includes hotels, restaurants and related services, has urged the government to include relief measures in the upcoming Union Budget 2022-23.

Nirmala Sitharaman. (Photo: PTI)

The vast hospitality industry, impacted by the Covid-19 pandemic since 2020, had just begun its journey to recovery when the new Omicron variant of the coronavirus cast a new shadow over operations.

The hospitality industry, which includes hotels, restaurants and related services, has urged the government to include relief measures in the upcoming Union Budget 2022-23.

The PHD Chamber of Commerce and Industry (PHDCCI) has made some budget recommendations that the government can consider in the upcoming budget to help the key sector that employs millions of people across the country.

THE EASE OF DOING BUSINESS

A one-stop customs clearance mechanism should be established in each state to facilitate the conduct of business for new hotels, as this will improve transparency and grant quick approvals.

LIQUOR UNDER GST

An appropriate framework must be developed and implemented to subject alcohol intended for human consumption to the Goods and Services Tax (GST) regime.

GST RATES FOR HOTEL AND RESTAURANT SERVICES

It is suggested that in order to ensure a level playing field between stand-alone restaurants and those located inside “starred” hotels, the GST rate on the latter category should be reduced from 18% to 12% with availability of Upfront Tax Credit.

Tourism services provided to foreign tourists in India against receipt of foreign exchange should be treated as “deemed exports” and GST exemption should be available.

To rekindle consumer demand, it is suggested that all outdoor dining and dining services, whether stand-alone or integrated into a hotel, be zero-rated or, at the very least, subject to GST at the rate of 5%. with full availability of input credit.

READ ALSO | Union budget 2022-23: here is what the working class expects from the government

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