Budget expectations: Hotels

31 Jan 2024 , 03:30 PM

A long pending demand of the hospitality sector has been the grant of infrastructure status to the sector. The key thing here is not just giving infrastructure status, for which an announcement was made many years ago. It has to be ratified by the Reserve Bank of India. Also, we want a uniform GST tax rate of 12%. In 2019, the government decided to have two slabs in GST. Rooms with tariff of over ₹7,500 attract 18% rate. We think it should be totally rationalized to 12%. And if for some reason that is not possible, the slab of ₹7,500 must be raised as it has been static for five years. Government has to take inflation into consideration while fixing these slabs. The third thing which is very important is the TCS (Tax Collected at Source) which stands at 20% for foreign travel if the overseas tour package is more than ₹7 Lakh. Below ₹7 Lakh, it is 5%, this needs to be rationalized. And lastly, the government has to look at developing new tourism destinations going forward, there are no two ways about that.