The Hotel Association of India (HAI) took up the issue with the director general of tourism, Ashok Pradhan, on Wednesday. HAI will also be taking up the issue with commerce minister Ramakrishna Hegde and tourism minister Madan Lal Khurana. HAI said while the threshold limit for zero duty EPCG scheme for software has been reduced to Rs 10 lakh from Rs 20 crore in the EPCG scheme 1998, for the hotel industry, the earlier policy where hotels are permitted to make imports in excess of Rs 20 crore at the zero per cent rate of duty continues.

"Tourism being a service sector should be treated at par with other service sectors by bringing in the required modifications in the EPCG scheme for stimulating investment flows in tourism infrastructure," said a HAI official.HAI has also calledfor permitting import of certain items under the EPCG scheme required in the hotel industry. The association has said jacuzzis, massage tables, swiss showers, jetshowers, streamers for hot towels, floor board convention heaters and orthopaedics mattress and pillows, among others should be permitted.

"These items are needed to upgrade the facilities and services in health clubs in hotels to which the foreign tourists are used to. Import of these items will help the hotels in maintaining their competitiveness at comparable international standards," he added. Meanwhile, the Federation of Hotel and Restaurant Association of India (FHRAI), in a memorandum to Khurana, urged the government to increase the hotel transaction limit to Rs 50,000 from Rs 25,000 for quoting the PAN and GIR number. In the budget, it had been proposed that it would be mandatory to quote PAN and GIR number in all hotel transactions exceeding Rs 25,000.Considering the high prices in hotel services and likely inflationary trends over thenext few years, the limit of Rs 25,000 is too small in hotel transactions, said FHRAI.

FHRAI has also demanded exemption of hotels and restaurants from the five per cent service tax.