Hotel industry exempted from service tax

New Delhi, Jan 1: In a bid to bail out the hotel industry that was hit hard after September 11 terrorist attacks in the US, government on Tuesday exempted the industry from service tax.

The exemption would be available for only those services that involve catering, an official release said, adding the finance ministry’s approval came following a proposal by the tourism ministry.

Hotel industry attracts 5 per cent service tax on billed amount. A rebate of 40 per cent is being given on the billed amount if catering is involved.

Now 100 per cent rebate would be provided on all services involving catering in hotels. Government also announced several measures to encourage tourism by aggressively marketing India as a safe and secure destination.

Planning Commission recently agreed to enhance the outlay for overseas marketing of India as a tourist destination from Rs 25 crore to Rs 51 crore during this financial year.

— PTI