To promote the prominent employment and foreign exchange generating sectors, the tourism ministry of India has introduced a concession in the GST rates and the proposal of ‘infrastructure status’ for five-star hotels. Furthermore, the ministry has also proposed few more suggestions to amend the relaxation to hotels which include offering a land on lease rentals for hotel construction at fewer prices, organising a National Tourism Regulator for better operability and establish other concerned regulatory bodies.
The proposals and amendments are put into focus with the objective to get 100 million jobs (which currently stays at 43 million), invite 40 million tourists (which currently stays at 14.4 million), and able to attract $100 billion worth of foreign exchange earnings (which currently stays at $24 billion).
Targeted Areas By Ministry
The four Joint Working Groups (JWGs) was established by the tourism ministry. The focus areas of the ministry will be regulated by four groups which are Hospitality Sector, MICE (Meetings, Incentives, Conferences, and events’ tourism), Start-ups, and Niche Tourism. The 4 groups will work accordingly on the suggestions from the tourist industry and will extract out an “Action-Plan” with particular goals and in the specific time period to achieve the targets.
The four Joint Working Groups (JWGs) will get a representative from the Department of Industrial Policy Industry and Promotion (DIPP), the tourism ministry, Invest India, and the government’s investment facilitation. The JWGs will give their recommendations in a month and simultaneously, the centre will put the suggestions in the public domain and post the regular Action Taken Reports on regular basis.
Alphons Kannanthanam, Tourism Minister has explained the proposal to reports and said that tourism ministry in collaboration with finance ministry will fasten the proposal which is under consideration to lower the GST rates for 5-star hotels. At present, the highest GST rate imposition on hotels is 28% on rooms with per room per day tariff is more than Rs. 7,500. The tourism ministry doesn’t favour the 28% of GST imposition on hotels as the foreign tourist will not be coming to India for that much high priced rooms instead they would like to go in neighbouring countries like Thailand, Malaysia, and Singapore and will be giving only 7% or less tax for the 5-star rooms.
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He further said that the hotels are facing difficulties in construction work due to high-cost land availability. The solution to this problem is that either state allows the land on concessional rates for hotel construction or states plan a model where the lease amount should be low for the hotels in exchange the hotels will agree to render a fixed share amount with respect to an annual turnover of hotels. This way implementation of laws will help hotels to build hotels with per day room tariff of Rs. 2,000 or less, which is the choice of ‘budget tourists’.
The minister appreciated the proposal to establish national tourism regulator and said that the framework will extract out and impose a better regulation for the tourism sector, pertaining home-based and online portals. An Infrastructure Status of the hotels in the country will also enable to construct the budget hotels in India. At present, only projects above Rs. 200 Crore are availing the status and the expected extension is of for projects above Rs. 50 Crore.
The ministry also demands to reduce the number of permits (which are 70 currently) to take before opening a hotel. The minister said that the tourism minister also consider to apply the approach used by Madhya Pradesh to make easy land and infrastructure availability for industries and the approach as a model can be adopted by other states if they wish.
The Tourism Minister said that the centre will plan to work with skill development programme to train the people with tourism-related skills and will make them capable to secure jobs.
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Rashmi Verma, Tourism Secretary said that the government had proposed 97 heritage monuments development under the Archaeological Survey of India (ASI) to provide facilities of toilets and purified drinking water at private and public sector corporations. The decision was in favour to attract more tourists in the country by providing basic amenities. In the near future, non-ASI sites will also be working on the same objective. She said that to favour the move, the companies also showed an interest to provide these facilities in seven ASI sites.
