Extend tax holiday to 5-star hotels also: Assocham

With less than a year left for the Commonwealth Games, industry chamber Assocham has sought extension of the five-year tax holiday scheme to five-star hotels in the National Capital region.

The government in 2007-08 had announced tax holiday scheme of five years for two-star, three-star and four-star hotels, besides convention centres in NCR.

"This facility needs to be extended to all categories of hotels including of five-star so that their capacity expansion takes place at desired speed to accommodate large number of travellers to India during 2010 games," the chamber said.

It also said that to accelerate the pace of construction, the hotel industry should be accorded an infrastructure status so that it can enjoy fiscal benefits.

The chamber said the hotel infrastructure, especially in 5-star category in Delhi and NCR where majority of tourists are likely to take shelter during the games is still inadequate and therefore their capacities are required.

Assocham secretary general D S Rawat said the hotel industry is highly capital intensive industry as Rs 300-500 crore (Rs 3-5 billion) is required to set up a five-star hotel.

The chamber also recommended that hotel industry should be exempted from paying tax on services received from foreign tour operators.

The Commonwealth Games are scheduled to be held in the National Capital from October 3-14 next year.