India's hospitality industry may be one of the heavily taxed sectors in the country, but that has not deterred global investors from looking at key properties in the country.
According to a media report, Brookfield Asset Management and GIC of Singapore are vying to buy 50 percent stake in Provenance Land that owns Four Seasons hotel and residences in Mumbai.
The deal is likely to value Provenance Land at over Rs 2,000 crore and could see Adarsh Jatia offloading between 26 percent and 49 percent stake, said a report in The Times of India.
Provenance Land has been constructing Four Seasons-branded ultra luxury residences at the 4.5 acre property located at Worli.
If the deal fructifies, the funds from the stake sale will be used for the company's plans to develop branded luxury homes and offices adjoining the Four Seasons hotel, the TOI report said.
There were reports that Provenance was constructing a 5-storeyed second tower with 26 luxury residences (for outright sale) with a price tag ranging from Rs 30 crore to Rs 100 crore, the TOI report added.
According to a recent report by KPMG, India's hospitality sector is expected to grow at 16.1 percent CAGR to reach Rs 2,796.9 crore in 2022. The sector contributes significantly to indirect tax revenue at the state and central level which includes revenues from VAT, Service Tax, and Luxury Tax etc.
As per the GST Council's decision all hospitality products above Rs 5,000 has been termed as luxury, drawing flak from the industry. The GST Council said along with rooms, even dining at restaurants at 5-star hotels will invite GST at the rate of 28 percent.
Experts are of the opinion that a higher GST rate on the hospitality sector could make the country's tourism products uncompetitive in the region. The industry also fears major events, congresses, conferences, etc. could give a miss to India in coming times.
Updated Date: Jun 12, 2017 12:41 PM