FHRAI proposes key reforms in pre-budget meeting for Indian tourism

At a pre-budget meeting, FHRAI urged essential reforms to boost India’s tourism and hospitality sectors, advocating for infrastructure status and GST rationalization.

NEW DELHI, INDIA – The Finance Minister chaired a crucial pre-budget conference at North Block in New Delhi on 25th June 2024, attended by the Federation of Hotel and Restaurant Associations of India (FHRAI), representing the tourism and hospitality industry along with other apex associations from the trade and service sectors ahead of Budget 2024-25. In the meeting, FHRAI presented critical suggestions aimed at boosting the tourism and hospitality industry and enhancing Indian tourism potential on the global stage.

FHRAI, being the voice of the hospitality sector in the country, expressed optimism about India’s future towards becoming a global tourism powerhouse by 2047. The association proposed essential regulatory changes to support industry growth, emphasizing strategic reforms to address current challenges and unlock growth opportunities aligned with sector targets.

One of the key requests put forward by the hospitality Federation to the Finance Ministry was to grant Infrastructure Status for hotels across all categories and convention centres built at a project cost of Rs.10 crore and above to give a fillip to the budget segment in the hotel industry.

GST rationalization was another significant concern highlighted by Mr. Pradeep Shetty, President FHRAI in the meeting. The Federation requested for 12% GST rate across all hotels and also for delinking of restaurant tariffs from room tariffs as the system of GST shifting to different slabs in the same hotel on different dates – under / over 7500 room rate – creates compliance issues and confusion among public. Although there is no evasion and avoidance of tax, but the said confusion has become a bone of contention for the hotels across the country due to notices and demands from the GSST department.

Pradeep Shetty, President of FHRAI, remarked, “Granting infrastructure status to hotels and convention centres across all cities is crucial for attracting investments and accelerating growth in the hospitality sector and the same would be in alignment with the Hon’ble Prime Minister’s vison of tourism to have the same potential as agriculture, real estate etc and to his assertion that the tourism is no longer a high fancy word representing the rich. We are encouraged by the Finance Minister’s assurance of support in addressing these crucial needs of the industry.”

He added, “We are confident in the Ministry’s commitment to implementing GST rationalization for the hospitality sector. FHRAI remains dedicated to fostering a robust hospitality sector that supports India’s flourishing tourism industry which has a multiplier effect on the economy and employment generation.”

FHRAI highlighted the significance of efforts under the “Incredible India” campaign and recommended for enhancement of budget for tourism branding and also requested for specific measures to promote MICE tourism in the country.

The Finance Ministry acknowledged the concerns of the industry and promised to give the necessary support to help the sector. The outcome of these discussions is anticipated to be reflected in the next budget, which will strive to expand the Indian tourism and hospitality industries.

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