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Hospitality gets industry status in Maharashtra with taxes at industrial rates
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Monday, 09 November, 2020, 12 : 00 PM [IST]
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Our Bureau, Mumbai
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The Maharashtra state government has accorded hospitality sector the status of an industry. The status was actually accorded to the sector back in 1999 due to continuous efforts of Federation of Hotel and Restaurant Associations of India (FHRAI) and HRAWI but had unfortunately remained only on paper and had no meaningful benefits. However, effective from April 1, 2021, hospitality as an industry will be levied tariffs and duties on electricity, water, property, development and non-agricultural taxes at industrial rates. The Hotel and Restaurant Association of Western India (HRAWI) has welcomed the move and thanked the government in aiding the revival of the sector.
“The Maharashtra Government’s recognition of hospitality as an ‘industry’ comes as a silver lining in the dark clouds. We welcome the decision and applaud the dynamism and commitment shown by our young Tourism Minister Aaditya Thackeray. We are also thankful to Chief Minister Uddhav Thackeray and the Principal Secretary, Department of Tourism Valsa Nair Singh for their support to the industry. The status had remained only on paper for over two decades but now with its implementation, hospitality will be entitled to receive benefits under special schemes and subsidies, with minimal to none procedural roadblocks. This will unlock the massive potential that the sector holds. With such progressive and industry-friendly policies, Maharashtra leads in tourism efforts and sets the benchmark for other states to follow. We congratulate the entire fraternity - Way to go!” says Sherry Bhatia, president, HRAWI.
The Government of Maharashtra had issued a Government Resolution (GR) dated April 7, 1999, conferring Tourism Sector the ‘Status of Industry’ but it was never implemented, until now.
“The HRAWI brought to the attention of the State Government about the long overdue resolution and requested that the GR be put into effect, especially during the post-Covid-19 period. I thank Uddhav Thackeray and Aaditya Thackeray for giving the sector what it needs and the timing couldn’t have been better. With its implementation, the operating cost of hotels and other tourism related sectors will drastically come down due to lower annual electricity rates and other land related rates. The industry is hopeful that apart from the first stage of benefits, the government will issue various other benefits listed in the GR, which would help to alleviate to some degree, the huge burden being felt post-Covid-19,” says Vivek Nair, member of honour, HRAWI and past president, FHRAI.
The HRAWI had been following up with the governments over this matter to get the industry the associated benefits. It was however only in a recent meeting with the Tourism Minister that the subject got the attention it required.
“The industry status unburdens the sector of utility payments and duties to the state which were at commercial tariff rates. This includes some of the high cost items like electricity, water and property, among others. At industrial rates, the operational costs will go down to a great extent. This is a big relief for our sector and has come at a time when hotel and restaurant businesses are severely hit because of the pandemic enforced lockdown and low consumer confidence. During the lockdown, in our web interaction with Aaditya Thackeray earlier in May, we had expressed the sector’s sore point on this topic. He had assured us resolution on this issue and five months later, he has acted on it. This shows the government’s commitment towards promoting hospitality and tourism in the state,” says Gurbaxish Singh Kohli, spokesperson, HRAWI.
“The HRAWI is grateful to Nair and all subsequent presidents for having relentlessly pursued the hospitality sector's demand for industry status and which, has finally been realised,” concludes Kohli.
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