FHRAI submits representations to heads of political parties requesting policy reforms for hospitality sector in Punjab

CHANDIGARH: India’s top hospitality association and voice of hospitality industry- Federation of Hotel and Restaurant Association of India (FHRAI) has submitted a memorandum to Chief Minister Charanjit Singh Channi, requesting policy reforms for survival and growth of hospitality industry. Is. state.

Assembly elections are underway in the state, the FHRAI has also presented representations to the heads of the contesting political parties, including the President of the Bharatiya Janata Party – Ashwini Sharma; President of Aam Aadmi Party – Shri Bhagwant Mann and President of Shiromani Akali Dal – Sukhbir Singh Badal. The association has appealed for a facilitating environment for the survival and revival of the hospitality sector in the state by implementing the policy measures required by the new government.

“The state of Punjab has always been a favorite tourist destination in the country and accordingly, has also been a preferred destination for the hospitality sector. Several renowned hospitality groups are operating businesses in cities, while many others are looking to invest in the state. However, today the hospitality industry is facing an existential crisis across the country including establishments in Punjab.

In this background, we request the government to bring some much-needed policy reforms for our industry. Of these, our most important request is to reduce the liquor license fee by 50 per cent for all categories of hotels and restaurants for the next 5 years to support the recovery of the industry in the state. The current license fee of INR 5 lakh per year for 5-star hotels is too high for the pandemic-hit industry.

We also request that VAT on sale of liquor in hotels and restaurants be reduced to 7 per cent from the existing rate of 14.41 per cent. Electricity constitutes a significant operating cost for all hotels and restaurants. The industry would be helped to recover the losses incurred during the pandemic, if the power tariff for the sector is increased from the existing tariff of Rs 6.91/kWh to Rs 5/kWh,” says Surendra Kumar Jaiswal, vice-president, FHRAI.

Among other requests, FHRAI has requested the government to open direct international flights from Mohali International Airport to countries like Canada, USA and Singapore for better air connections for lakhs of Punjabis residing in these countries.

“Facility of international flights from Mohali will not only be beneficial for the residents of the state and those living abroad, but it will also give a boost to the tourism sector. In addition, the state government needs to provide adequate and organized municipal services and infrastructure facilities to the hospitality sector.

Proper access or access roads with signage and door to door garbage collection facility are some of the very basic requirements that are required. More importantly, there is a need to rationalize and reduce the number of statutory and regulatory compliances including licenses, certificates, permissions and NOCs required for hospitality projects,” says Jaiswal.

Hotel projects being highly capital-intensive with land cost being a major component of investment, FHRAI has asked the government to provide land at concessional rates. It has urged the government to grant industry status to the sector so that eligible hotels can benefit from industrial rates instead of charging commercial rates for electricity supply, water supply, taxes and other payments.

“The offer of land at subsidized rates will play a vital role in attracting new and potential investors to the sector which has the potential to have the highest multiplier effect on employment generation. Also, it is imperative that investment subsidies and tax holidays be provided for investments in STPZs and other tourism projects implemented in the state. This will accelerate the growth of tourism and hospitality in Punjab. The government is also requested to accord industry status to the hospitality industry by following a simple web-based registration process like enterprise registration of MSMEs.

Eligibility for industry status will be based on hotels with valid licence, statutory registration like GSTIN. India is facing stiff competition from neighboring destinations, especially due to the high rate of GST and other factors that make the overall tourism package for India expensive.

The hospitality industry should not be treated as a ‘sin industry’ and hence the GST rates on room tariff should be reduced and Input Tax Credit (ITC) should be allowed for GST on food. We request the Punjab government to make necessary recommendations in this regard,” concluded Jaiswal.

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