Tourism sector seeks ten-year tax holiday for new hotels in the country

Ten-year tax holiday for new hotels, inclusion of hotels as infrastructure and service tax and excise duty exemptions are part of the tourism industry wishlist that Kumari Selja, Union Minister for Tourism will be putting before Finance Minister Pranab Mukherjee. Selja is likely to meet Mukherjee later this week with proposals to rationalise import duty on adventure sports equipment, export status for earnings of inbound tour operators besides concessions for the hotel industry. “I met the industry stakeholders and will be taking up their demands with the Finance Minister,” said Selja.

According to a report in Times of India, the tourism industry has been badly hit by global recession in the past one year. In fact, foreign tourist arrivals dropped drastically in October 2008 and the trend continued after the Mumbai terror attacks. Tourism industry stakeholders hope the government will be far more generous. Amongst the top demands of the industry is inclusion of hotels as infrastructure under section 80-1A of the Income Tax Act along with airports, sea ports and railways. The industry has also sought a ten-year tax holiday for all new hotel projects in the country.