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HRAWI to meet CM of Maharashtra, discuss hospitality industry’s issues
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Saturday, 22 November, 2014, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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fiogf49gjkf0d With the hospitality industry in Maharashtra facing one of its worst economic downturns, the Hotel and Restaurant Association of Western India (HRAWI) - the apex body for hotels and restaurants in the region - has decided to meet the state chief minister and the tourism minister with a wishlist for the sector.
Bharat Malkani, the association’s president, said, “Over the last 25 years, successive governments in the state have raised taxes, introduced new levies and increased procedural requirements. As a result, the industry has suffered. We expect the new government to rationalise the tax structure and policies, so that the sector, which is bleeding profusely, would bleed to death,” he added.
HRAWI has identified seven issues that it would take up with the chief minister. These are as follows:
- Single-window clearance for licences;
- Elimination of the duplication of certificates that need to be taken from the Food Safety and Standards Authority of India (FSSAI), local bodies, municipalities and municipal corporations;
- Rationalisation of room rates by increasing hotels rooms;
- Development of Swachh Bharat and sewage treatment policies for cities and towns;
- Skill development through the Hunar Se Rozgar programme and apprentice harmonisation, and
- Rationalisation of entertainment tax and the capital value tax system
- Another challenge that the sector has been facing is that the new laws haven’t replaced the existing ones, but duplicated them. After the introduction of the Food Safety and Standards Regulations (FSSR), 2011, it became mandatory for all food business operators (FBO) to either acquire licences or register, depending on their turnovers, under the new regulations.
“But this did not trickle down to the local bodies and municipalities. FBO now need to acquire licences or register under both FSSR, 2011, and the concerned health department. This amounts to duplication,” Malkani said.
“While we have been appealing to the government to provide guidelines to the local bodies on FSSR, 2011, the nature of the problem reemphasises the need for a single-window clearance system for hotels,” he added.
Revenue source
“The hospitality industry is one of the highest creators of jobs, among the highest tax-generating sources, one of the highest foreign exchange earners and one whose growth trajectory can outpace the growth of several other industries put together,” stated Malkani.
“With a bit of vision and support from the government, this industry can easily increase its contribution to the gross domestic product (GDP) and play a much bigger role in its progress,” he added.
Current scenario
Malkani said, “Currently, all kinds are direct and indirect taxes are being levied upon the hospitality sector. Some of these, including entertainment tax and luxury tax, amount to duplication. Others, such as the new property tax valuation system, are irrational.”
“For a four-night stay in Mumbai, tourists have to pay for an additional night’s stay in taxes alone. This makes staying in the city prohibitive for tourists, and they use the city merely as a transit point and not a tourist destination,” he added.
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