Budget 2021 Expectations for Hotels, Travel, Tourism: The Covid pandemic changed our lives forever, rattled economies, and dismantled industries. The hospitality sector maybe received body blows due to the Coronavirus and lockdown measure. Now, sector professionals are banking on the Narendra Modi government’s February 1 Budget 2021 to heal the gnawing discomfort.
While lakhs of livelihoods will reply upon the announcements of Union Finance Minister Nirmala Sitharaman in the Union Budget, sector professionals are looking for formulation of pragmatic policies, rationalisation in tax price, and ease of performing enterprise from the Central government.
“It is critical to protect and support the hospitality sector today, more than ever. While the sector is slowly recovering on the back of domestic tourism, the journey to revival needs strong handholding from the government. According to‘ Industry’ status to hotels and hospitality will allow the sector to receive benefits available to manufacturing and will enable the hospitality sector to unlock immense potential. Moreover, it will save the livelihood of millions of people who are, directly or indirectly, dependent on the sector. Additionally, formulation of pragmatic policies, rationalisation in tax rate, easy compliances and ease of doing business can help the sector in speeding up return to normalcy at a fast pace,” KB. Kachru, VP, Hotel Association of India & Chairman Emeritus & Principal Advisor, South Asia, Radisson Hotel Group stated ahead of Budget 2021.
According to pre-Budget 2021 suggestions from the Hotel Association of India, hotels have to be accorded Infrastructure Industry status. It is encouraged that the government have to declare hotels of above Rs 25 crore Capex (excluding land) as infrastructure. Hotels ought to be charged energy prices applicable to Industries and the license period have to be elevated to 3-5 years alternatively of annual. A single hotel license to serve liquor have to be issued to hotels in 5-star and larger category. The government have to loosen up and regulate liquor operation timings for 5-star hotels across India, HAI stated.
In Budget 2021, the Central government have to decrease earnings tax prices. The present earnings tax price is 30 per cent plus a surcharge of 7 per cent or 12 per cent (based on earnings) plus 4 per cent education cess. Thus the efficient tax price operates out to 34.94 per cent around. The reduction in tax will raise money flow of the providers. It will also provide some sort of exemption on account of pandemic. The whole sector is taking the hit of numerous fixed costs like mandatory upkeep of properties, employee salaries and so forth. even with no income, the Hotel Association of India encouraged.
The Modi government have to decrease the GST price on Hotels in Budget 2021. The reduction in GST will have a direct effect on the space prices of the hotels. Such reduction would provide quick relief to the sector as shoppers will be charged at a lesser price which will raise the occupancy of the hotels. Reduction in GST Rate to say 12 per cent for hotels exactly where the present GST is 18 per cent, will make India more competitive and be in line with other Asian economies like Hong Kong, China Thailand and Singapore exactly where the tax price ranges from to 7 per cent, the Hotel Association of India stated. In Budget 2021, the Modi government have to bring electrical energy below GST net, and place Liquor below GST will make sure single tax and single compliance, it stated.