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Budget 2020: Hospitality sector hopes for tax relief, single-window clearance

The hospitality sector is also expecting a fillip to infrastructure development in this Budget, with special focus on budding tourist destinations

twitter-logoBusinessToday.In | February 1, 2020 | Updated 10:01 IST
Budget 2020: Hospitality sector hopes for tax relief, single-window clearance
Union Budget: Hospitality sector's wishlist includes tax relief for the sake of infrastructre development

The hospitality industry is expecting a helping hand from Finance Minister Nirmala Sitharaman in the Union Budget 2020-21. Given the emphasis government is putting on developing India as a favoured tourist destination, some steps for the hospitality sector are likely to be included in the Finance Minister's second Budget Speech.

In September last year, the government lowered GST rates levied on certain hotel room tariffs. The hospitality sector expects further tax relief for it in Budget 2020, which in turn will help it to expand its reach.

Also read: Budget 2020 Live Updates: FM Nirmala Sitharaman to present budget at 11 AM; middle class, corporate await surprise

On the topic of expansion, the sector is also expecting a fillip to infrastructure development, with special focus on budding tourist destinations. One of the major demands from the industry ahead of the Budget is a single-window clearance.

Here is a look at what the hospitality industry expects from Budget 2020:

Tax relief

In its meeting in September last year, the GST Council had lowered tax rates on room tariff of Rs 7,500 or above to 18 per cent from 28 per cent. Some of the industry stakeholders are asking for further reduction in GST rates across segments to bring them closer to those in small countries. The argument is that these countries are attracting more tourists than India due to lower tax rates on hotel rooms. The industry is vying for lower tax outgo as it will also help it develop infrastructure.

FULL COVERAGE:Union Budget 2020

Single-window clearance

Presently, hoteliers have to run from pillar to post in order to obtain the required licences and registrations, including ESI registration, GST registration, bar licences, etc. The hospitality industry expects the Union Budget to introduce a single window clearance for licensing in order to promote ease of doing business.

Infrastructure development

Hospitality industry is expecting Union Budget 2020-21 to introduce measures that will help it with infrastructure development and upkeep at new and existing locations. The sector will also keep an eye on measures in the Budget Speech to improve road and railway infrastructure which will facilitate connectivity to tourist destinations, new and old both, and help draw in more business.

Demand for lower taxes is also based in infrastructure development. Last GST rate cut helped hoteliers expand their portfolios and make new investments, something the sector will like to see in future too. The hotel industry has also been demanding an infrastructure status for quite some time now, which it expects to come to pass in this Budget.

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