Budget 2023: Hospitality body FHRAI seeks EPCGS continuation, ECLGS repayment period extension | The Financial Express

Budget 2023: Hospitality body FHRAI seeks EPCGS continuation, ECLGS repayment period extension

Ease of doing business for MSMEs: The Union Cabinet, chaired by Prime Minister, Narendra Modi, in August this year had approved increasing the ECLGS limit by Rs 50,000 crore to Rs 5 lakh crore from the previous limit of Rs 4.5 lakh crore. The additional amount was assigned only for enterprises in hospitality and related sectors. 

Budget 2023: Hospitality body FHRAI seeks EPCGS continuation, ECLGS repayment period extension
FHRAI also requested Sitharaman to grant the infrastructure status to the hospitality industry for better credit access.

Ease of doing business for MSMEs: Hospitality body Federation of Hotel & Restaurant Associations of India (FHRAI) in its budget suggestions to the finance minister Nirmala Sitharaman has made a number of requests to strengthen the sector’s post-Covid recovery. The association has urged Sitharaman to continue the Export Promotion Capital Goods Scheme (EPCGS) for another 10 years and extend the loan repayment period under the Emergency Credit Line Guarantee Scheme (ECLGS) of 10 years or based on the loan repayment period of the principal loan.

Currently, the repayment period under the ECLGS scheme is of three-four years including the moratorium period. The Union Cabinet, chaired by Prime Minister, Narendra Modi, in August this year had approved increasing the ECLGS limit by Rs 50,000 crore to Rs 5 lakh crore from the previous limit of Rs 4.5 lakh crore. The additional amount was assigned only for enterprises in hospitality and related sectors. 

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FHRAI also requested Sitharaman to grant the infrastructure status to the hospitality industry for better credit access. “Currently, hotels built with an investment of Rs 200 crore or more have been accorded infrastructure status under the RBI Infrastructure lending norm criteria. The association has requested that this threshold be brought down to Rs 10 crore to give a fillip to budget segment hotels. This will enable hotels to avail term loans at lower rates of interest and benefit from longer repayment periods.” 

Among other recommendations shared with Sitharaman were: 

  • Uniform GST at 12 per cent across all hotel categories and room tariffs 
  • Extension on investment-linked benefits under Section 35 AD for brownfield hospitality projects also 
  • Modification in the Leave Travel Allowance (LTA) rules to include the amount spent on hotel stays to be considered as LTA expense 
  • Treating payments made by foreigners in INR in hotels as foreign exchange earned for the purpose of the EPCG scheme 

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First published on: 27-11-2022 at 17:57 IST