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HRANI pitches for 12% hospitality tax to GST council

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The Hotel and Restaurant Association of Northern India (HRANI), has submitted for a “One Nation One Hospitality Tax” of 12 per cent to the sectoral working group of travel and tourism formed by the GST council. The first meeting of the sectoral working group of travel and tourism, formed to interact and examine industry representations and to make recommendation to the GST council, was held at Madhya Pradesh Bhawan, Chanakya Puri, New Delhi wherein the co-conveners Sungita Sharma, principal commissioner, Mumbai and Raghwendra Kumar Singh, commissioner, commercial tax, Madhya Pradesh interacted with the industry associations.

HRANI has appealed the working group for “One Nation One Hospitality Tax” at 12 per cent, and to change GST slab to minimum INR 10,000 as a slab of INR 5000 does not constitute luxury.

A representation under the signatures of President, Mr. Sanjay Sood was submitted by HRANI. The working group was apprised on the tax incidence in current regime and the increased impact under the GST regime to be effective from July 1, 2017 through a table mentioned as under:

img1

*Rajasthan

Threshold of luxury tax in current regime: INR 3000

Tax incidence under GST (INR 1000 – INR 5000) at 12 per cent to 18 per cent

Total Impact on most of the budget hotels under GST goes up from 12 per cent to the extent of 18 per cent

The document also highlighted the impact of taxes on competitiveness of tourism; it was submitted that most of the nations recognise that tourism is a critical economic driver for the nation. European countries have fostered the growth of tourism by keeping low taxes on this sector as shown in the table given below:

img2 The meeting was attended by representatives of other industry associations like FAITH, FHRAI, HAI, IATO, TAAI, TAFI, ADTOI, ICPB, ITTA, IHHA and ATOAI including HRANI. Senior officials from state and central government including Ministry of Tourism were also present on the occasion. Presentations were made by the representatives of all trade bodies.

The sectoral working group gave a hearing and requested the trade bodies to send concerns at the earliest for a comprehensive note for GST council. The group also asked the industry to send its apprehensions relating to operational and administrative issues or any queries that may be affecting business upon transiting to the GST regime.

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