Ahead of the GST Council meeting scheduled on May 28, the apex Hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) has urged the Finance Minister Nirmala Sitharaman to provide a slew of sops for the revival of the industry hit hard by the coronavirus pandemic induced lockdown and economic downturn.
“We are requesting for the threshold limit for charging GST at 18 per cent on hotel room tariffs be raised from the present Rs 7500 to Rs 9500 for bringing parity of rates between the Rupee and the Dollar. Back when the threshold was fixed at Rs 7500, the exchange rate of Dollar per Rupee stood at Rs 64, but today the same has reached Rs 73 per Dollar. Also, the threshold limit for zero GST for hotel rooms should be raised from the present Rs 1000 to Rs 2000 per room per day. The move will boost the lower budget segment, thus encouraging domestic travel and promoting tourism in a big way,’’ says Gurbaxish Singh Kohli, Vice President, FHRAI.
Further, Kohli urged FM to allow valid GST hotel bills of any State other than the home state of the Individual assessee paid for by digital mode exempt under section 80C for an additional amount of Rs 50,000/ will encourage citizens to travel within India which will further give a much-needed impetus to hotels as well as ancillary industries.
FHRAI joint honorary secretary Pradeep Shetty suggested that a mechanism should be in place to enable the establishments to avail inputs of GST paid on rent and other GST cost.
Kohli said these incentives are needed for the promotion of domestic tourism with restricted foreign travel. According to him, lockdown curbs across various states and cities have impacted hospitality business enormously. Even at the beginning of 2021, the revenue of the industry was below 20 percent of pre-pandemic levels and March onwards, the revenue has not crossed even 5 percent.
Kohli said the Indian Hotel industry’s total revenue in FY 2019-20 stood at Rs1.82 lakh crore. As per industry estimates, in FY 2020-21, approximately 75 per cent of the industry's revenues got wiped off. That is more than Rs 1.30 lakh crore revenue hit.