FHRAI sends pre-budget recommendations to the Ministry of Finance

The Federation of Hotel and Restaurant Associations of India (FHRAI) sent its pre-budget recommendations to Minister of Finance Nirmala Sitharaman and suggested including the hospitality and tourism sectors in the national infrastructure pipeline. .

He demanded that the projects needed to increase the tourism infrastructure in terms of hotel rooms, convention and exhibition centers, airport infrastructure, roads, last mile connectivity between popular tourist centers, etc. ., be included in the financing list under the National Infrastructure Pipeline, apart from the 7,400 infrastructure projects already identified.

Inclusion of sectors related to hospitality and tourism in infrastructure projects listed in the National Infrastructure Pipeline (NIP) set up by the Development Finance Institution (DFI) by the Ministry of Finance to promote financing infrastructure will allow the ailing hotel sector to benefit from funds with extended repayment periods and at a low interest rate, according to the association.

He further said overseas travel was at least 12 to 15 months away from pre-pandemic levels. Therefore, special tax incentives on domestic travel will not only be good for the economy, but also subscribe to the Prime Minister’s vision of visiting more national destinations. FHRAI has claimed tax deductions in personal and business computer returns for expenses made for travel to India.

This could be done for a fixed period of a few years during which hospitality returns to phase with pre-pandemic conditions. The FHRAI said in its letter to the Minister of Finance that the conditions prevailing after the pandemic strongly require the government to take facilitation measures to provide enough incentives to encourage the 28 million and more people who travel outside India during the pre-pandemic period, to stay and vacation in India that will help the tourism and hospitality industry to stand up and survive. According to the association, the government should review the decision to introduce LTC cash vouchers instead of the LTC tariff to central government employees, and certain incentives should be offered to companies if they organize meetings and conferences in hotels in India.

These may include granting partial or full tax exemptions on expenses incurred, when calculating income. Certain incentives, such as a free visa on arrival, may be given to foreign companies to organize MICE events in India and help boost sales of domestic host companies. FHRAI said that currently hotels built with an investment of Rs 200 crore or more have been granted infrastructure status. This threshold must be reduced to Rs 10 crore per hotel to give a boost to the budget segment of the hotel industry. The association said this would allow hotels to qualify for term loans at lower interest rates and also have a longer repayment period.

The association also suggested granting industry status to the hospitality industry and creating a corporate fund to encourage all states to align their policies and compensate for losses that may arise due to its implementation. “The lower operating cost spread over a longer payback period will lower the cost of our supply, which will boost demand and, with a higher influx of foreign and domestic tourists, boost confidence in capital spending.” in tourism and thereby increase structural employment growth across the country, ”FHRAI said in its letter and added:

“Although industry status has been granted to hotels by many state governments, the incentives and privileges associated with an industry are never conferred on the industry. »Allow input tax credit for restaurants, treat payments made by foreigners in rupees at hotels as earned currency for EPCG purposes, allow business losses to be carried forward from the existing 8 years to 12 years for a fixed period in the future were among the other suggestions of the FHRAI.


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