HOSPITALITY SECTOR OPTIMISTIC AHEAD OF UNION BUDGET

Mumbai: The Hotel and Restaurant Association of Western India (HRAWI) has announced that it expects the new Finance Minister to present a friendly budget. The sector that has been at the receiving end of rising taxes and other burdens for over a decade now is hopeful that at least some of the recently introduced burdens will be eased out this year.

In the run up to the budget, the association has identified four key parameters that will play a crucial role in the resurrection of the sector. To reduce the burden and help boost commerce, HRAWI has suggested the following:

Infrastructure: Lowering the minimum project cost mandated for inclusion of hotels in the Reserve Bank of India’s Infrastructure Lending List from Rs.200 crores to Rs.20 crores for hotels that have 20 or more guest rooms.

Depreciation: Depreciation on hotel building under Section 32. Hotels were eligible for a depreciation allowance of 20 per cent on their ‘Plant’ (Building) till March 31, 2002. Thereafter, it was scaled down to 10 per cent vide Notification No. 291/2002, dated September 27, 2002. HRAWI requests for restoring the 20 per cent depreciation allowance.

TDS: Under Section 194H, hotels are required to deduct tax at source at the rate of 10 per cent on commissions paid to travel agents. In actual practice, the payments received from travel agents by hotels are net of commission. Subsequently, hotels have to deposit the applicable tax on their own account and later on make efforts to recover the same from the travel agents. Commissions on hotel bookings should be exempt from TDS.

De-linking of Taxes: Every budget either introduces or reduces or increases some tax and links it with the star category of the hotel. HRAWI would like to urge this Government to not link any taxes (past, present and future) to star category.

The hotel industry is presently plagued by several bureaucratic obstacles and the growth trajectory of the overall sector including tourism, is stagnating. The industry has been battling to keep up with the harsh financial burdens brought about by both the central and state governments that include Service Tax – charged by the Central Government, Luxury Tax – charged by the State, Value Added Tax (VAT) – on Food and Beverage, Excise Duty – on Beverages and Octroi Duty - on items imported into the State, among others.

The hospitality industry has high expectations from the new government based on the pre-election manifesto that promised tourism and hospitality to be one of the pivots for economic growth. Tourism plays a key role in socio-economic progress through creation of jobs, enterprise, infrastructure development, and foreign exchange earnings. The new government has acknowledged this and only the outcome of the budget will determine if the tourism and hospitality industry will receive its due.

About Hotel & Restaurant Association Western India (HRAWI)

The Hotel and Restaurant Association (Western India) is a 64 years old Association of Hotels and Restaurants in Western India. Its members include Hotels up to 5-Star Deluxe categories like The Taj, Trident, Hyatt, J.W. Marriott and The Leela who are some of the prominent members of our Association. With around 1300 members across Western India, HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and the Union Territories of Daman, Diu & Silvassa is considered to be the voice of the Hotel Industry. The association is part of the national body of Federation of the Hotels & Restaurants Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr. J.R.D. Tata.

Private Enterprise To Thrive In Mumbai Under AAP Ki Sarkar - Announces Opposition To LBT, APMCs & Other Multi Layered Taxes

“Private Enterprise To Thrive In Mumbai Under AAP Ki Sarkar” – Satish Jain

Announces Opposition To LBT, APMCs & Other Multi Layered Taxes

                                                                

Mumbai: “Contrary to what is projected by certain political parties, Aam Aadmi Party’s (AAP) style of governance will help businesses and private enterprises thrive in Mumbai. We will encourage and help citizens to create wealth and improve their standards of living,” announced the former fund manager and current AAP candidate for Lok Sabha from North Mumbai, Satish Jain.

An alumnus of IIM Bangalore and an integral part of brand India, Satish Jain says AAP has always been in support of the hard working and honest business class. “We are only against crony capitalism. We are against those business houses that exploit the system and extract special favours from the Government. Such practices, anyways, are detrimental to sustainable growth and development,” he explains.

“An administration that is fair and honest will ensure that all business houses get equal opportunities and work under a level playing field. But what has happened till now is that successive Governments have been granting special privileges and licenses to a favoured few. These privileged few either get to extract national resources like gas, coal and iron ore at a fraction of the real value or get permission to operate as a monopoly. In either case, the nation loses revenue and end users pay a higher charge. Only crooked business houses and corrupt politicians benefit from such practices,” he adds.

Part of the core team that developed the manifesto and economic policy of AAP, Satish was also responsible for exposing the multi crore electricity scam in Maharashtra. “We are only against malpractices that business houses indulge in the name of capitalism. Crony capitalism not only makes India poor but also majority of the Indians poorer. Clean businesses, on the other hand, make the nation rich. Vendors who sell vada-pav; corner shops that sell grocery; consultants who advise their clients; artists who design visiting cards; CAs who write accounts; techies who develop websites, are all doing businesses, and contributing to the growth of the nation. We want all of them, big or small, to flourish,” he adds.

“AAP supports General Sales Tax (GST), however it is against Local Body Tax (LBT), APMCs and other multi-layered middlemen. We believe that if corruption is reduced and the ‘parallel economy’ integrated into the mainstream economy, growth would accelerate. Tax collections can go up even if tax rates are cut, reducing the fiscal deficit to less than 2% of GDP. Given India’s favorable demographics, the opportunity to create India into a economic powerhouse is immense if we can provide transparency, integrity and participative policies.”

“Mumbai has a throbbing business culture and a thriving business community. AAP will ensure that the environment is healthy and friendly. With the adoption of strong anti corruption practices that we will put in place, emerging entrepreneurs will not need to make multiple rounds for their ‘Goumusth’ or other registrations. Our policies will benefit all residents of Mumbai, be they rich or poor,” concludes Satish Jain.

Satish Jain’s entry into politics is preceded by an impressive track record in the financial sector. Rated by many surveys as one of the top fund managers in Asia, Satish’s career spanned eighteen years in the financial sector and included stints with Morgan Stanley and HDFC as Executive Director and Portfolio Manager. Allied with Arvind Kejriwal since the India Against Corruption (IAC) movement and inspired by the same, Satish Jain has quit his lucrative career to join full time politics. He is one of the 317 candidates fielded by AAP for the current Lok Sabha elections. Other candidates fielded by the party include, Mayank Gandhi from Mumbai North West, Medha Patkar from Mumbai North East, Meera Sanyal from Mumbai South, Phiroze Palkhiwala from Mumbai North Central and Sunder Balakrishnan from Mumbai South Central.