Union Budget 2022-23: Here's what the hospitality industry expects from the Centre this fiscal

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Union Budget 2022-23: Here's what the hospitality industry expects from the Centre this fiscal

Union Budget 2022-23: Here's what the hospitality industry expects from the Centre this fiscal

FP Trending • January 25, 2022, 19:23:03 IST

The sector, which employs millions of people in the country, continues to remain one of the worst-affected sectors in the COVID-19 pandemic

Union Budget 2022-23: Here's what the hospitality industry expects from the Centre this fiscal

With the Union Budget due to be presented on 1 February, people are eagerly waiting for Finance Minister Nirmala Sitharaman to announce benefits and exemptions for industries affected due to the ongoing coronavirus pandemic. This includes the hospitality sector, which is looking for incentives and lower taxes.

According to an India Today report, the PHD Chamber of Commerce and Industry (PHDCCI), has put out some recommendations for the upcoming Union Budget to help the hospitality sector get back on its feet.

What do the proposal include?

The PHDCCI’s ideas include bringing liquor under the ambit of Goods and Services Tax (GST) and revamping the GST system.

People from the hospitality sector are demanding a single-window clearance system in each state, for new hotels, which can ensure ease of doing business and greater transparency.

Furthermore, the industry is also demanding that GST rates be standardised. This can also help reduce the disparity in between rates charged by restaurants inside starred hotels and standalone ones.

What other measures can the government undertake?

Several individuals in the hospitality sector are asking the government to be more proactive about helping the industry, including providing furloughs in case of further lockdowns. According to a Live Mint report, several hoteliers have suggested more interest-free loans, availability of GST Input Tax Credit (ITC) and subsidies.

Representatives of the industry have also demanded measure that can help them survive any further lockdowns and COVID-19 restrictions such as those imposed on dining and delivery after the rapid spread of the Omicron variant.

The sector, which employs millions of people in the country, continues to remain one of the worst- affected sectors in the pandemic.

In January 2021, the National Restaurant Association of India (NRAI) had stated that more than 24 lakh people lost their jobs in the hospitality sector, after over 25 percent restaurants were shut due to the lockdown last year.

The hospitality sector has demanded travel expenses be made deductible under the Income Tax Returns in the upcoming Budget. This can be sustained till the sector bounces back to its pre-pandemic strength, according to Gurbaxish Singh Kohli, Vice President, Federation of Hotel & Restaurant Associations of India (FHRAI).

According to IANS, Kohli said that making travel expenses come under ITR can help almost 28 million people, who travel outside India, holiday within the country. The measure can also help Meetings, Incentives, Conferences and Exhibitions (MICE) tourism to shift from low-cost destinations such as Southeast Asia to places within India.

The hospitality sector appealed to the government to bring the infrastructure status threshold to Rs 10 crore per hotel. Presently, the threshold is Rs 200 crore, according to IANS.

The industry is hoping to get some major incentives that can help revive the sector amid the continuing coronavirus pandemic. It is yet to be known if the demands of the hospitality sector will be met by the Union Budget 2022-23.