HRAWI to meet new CM with seven key issues of hospitality sector

November 21, 2014 5:54 PM

FHW Staff– Mumbai The hospitality sector, which is going through one of its worst ever economic downswings, is hoping for a reversal of trends with the formation of the new Government in Maharashtra. It is expecting the introduction of rational policies and stronger infrastructure creation that will go on to boost the tourism and hospitality […]

FHW StaffMumbai

The hospitality sector, which is going through one of its worst ever economic downswings, is hoping for a reversal of trends with the formation of the new Government in Maharashtra. It is expecting the introduction of rational policies and stronger infrastructure creation that will go on to boost the tourism and hospitality industry in the State.

Bharat Malkani, president, Hotel & Restaurant Association of Western India (HRAWI), said, “As soon as the Government settles in, we will be meeting the chief minister and the tourism minister with vision for the hospitality industry. In the last twenty-five years every successive Government has regularly raised taxes, introduced new taxes and increased procedural requirements. In return, the industry has suffered. Our request from the new Government is that the tax structure and policies be rationalised; otherwise, the hospitality sector which is bleeding badly, will bleed to death.”

The association has identified seven key issues that it would take up with the chief minister on behalf of the hotel industry. The issues include single window clearance for licenses; eliminating duplication of certificates that need to be taken from Food Safety & Standards Authority of India (FSSAI) and local bodies, municipality and municipal corporations; rationalisation of room rates by increasing hotel rooms; developing Swachh Bharat and sewage treatment policies for cities and towns; skill development through the ‘Hunnar Se Rozgar’ programme and apprentice harmonisation; rationalisation of entertainment tax and the capital value tax system.

Talking about the industry’s existing scenario Malkani said, “Currently, all kind of direct and indirect taxes are levied on the hospitality industry. Some of the taxes like (entertainment tax and luxury tax) amount to duplication and some like the new property tax valuation system are irrational. For every four nights a tourist stay in Mumbai the tourist pays one additional night stay in taxes alone. This makes staying in Mumbai prohibitive for tourists and they use the city merely as a transit point instead of as a tourist destination like most other cities in the world.”

Another challenge the industry has been facing is that new laws are not replacing existing ones, but duplicating them. Post introduction of the FSSAI Act, it became obligatory on all Food Business Operators (FBOs) to acquire license under this Act. “But this did not trickle down to the local bodies and Municipalities. FBOs now need licenses from both the Health departments and under the FSSAI Act, which amounts to duplication. While we have been appealing to the Government to provide guidelines to the local bodies on the FSSAI Act, the nature of the problem reemphasises the need for Single window clearance for hotels,” elaborated Malkani.

“The hospitality industry is the highest creator of jobs, is the highest tax generating source, one of the highest foreign exchange earners and one whose growth trajectory can outpace the growth of several other industries put together. With a little bit of vision and support from the Government, this industry can easily increase its contribution to the GDP and play a much bigger role in its progress,” concluded Malkani.

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