The upcoming budget 2022-23
With inbound tourist arrivals unlikely amidst the pandemic, the industry wants the government to incentivise domestic travels with income tax benefits for a limited period so as to help the hospitality and tourism sector get up again by tapping the pent-up demand for holidays, within the country. Thousands of hotels and restaurants are struggling to stay afloat due to covid impact. Hospitality and tourism industry is struggling to survive in this difficult time. Nandivardhan Jain, CEO, Noesis presents few suggestions for the upcoming budget 2022-23.
- A financial assistance package for the remuneration of the tourism and hospitality industry is needed. To pay salaries of various staff as well as their employee provident fund and other medical expenses bared by their employers. This would help retain staff as well as help the business function utilizing minimum resources to run their business.
- Infrastructure Status for the industry, so that the hospitality sector is able to access capital at lower cost and for a longer tenure up to 20 to 25 years. As hotels are high capex business with a longer gestation period.
- For Infrastructure, benefits to be provided for lower taxation, utility tariffs.
- Recommended a higher depreciation rate for hotel buildings from 10% to 35%. Since hotel building comprises 70% of the project cost and gets depreciation of 10% only.
- Capital expenditure in Plant and Machinery is at 15% to add an additional 20%.
- A single clearance system and digitization and ease of setting up a hotel would help many start a hotel in a seamless manner.
- A tax relief is also a need of the hour as taxes are high, as it has taken a toll on the industry in the last two years. A reduction in taxes for hospitality would help them stabilize their business for the due course of time.
A change in GST tax structure to flat 5% irrespective of room tariff.