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Hospitality industry calls for lower tax

Sandesh Prabhudesai in Goa

While the government admits that tourism is a major source of foreign exchange in India and steps are necessary to give a boost to the sector, members of the hospitality industry points out that nothing much has been done to promote tourism these past few years.

The industry dogged by the steep hospitality tax of 35 per cent complains that in the last three years room occupancy, on the whole, has reduced by 40 per cent.

Sunder Awatramani, the vice president of the Hotel and Restaurant Association of the western region points out that competing with other Asian countries like China, Indonesia, Thailand or Malaysia is next to impossible as they are all offering much cheaper packages than India.

"How can we compete them when we have to pay almost 35 per cent towards taxation", asks Vasant Shetty, the association secretary. He claims that the taxation in China works out to only four per cent while it is not more than 10 per cent in any country in the world.

Perhaps to draw attention to their plight the HRA of western region has set "Tourism - promote or perish" as the central theme of the tenth regional convention beginning in Panaji on Saturday. The members feel that in order to help them to survive the government must bring down the tax to 10 per cent.

"The time has come where we can either flourish with the government's help or close down the shop", says Awatramani. He complains that it's not just the Centre but several state governments are also turning a deaf ear to their problems.

He further complains that the central Budget did not mention a single word on tourism and added that besides Rajasthan and Goa, it has not been granted industry status.

Coming down heavily on what they term as indifferent attitude of the authorities, the association has invited, Chhattisgarh Chief Minister Ajit Jogi, Maharashtra Deputy CM Chagan Bhujbal, Goa Chief Minister Manohar Parrikar, tourism minister of all the states as well as Atul Sinha, director general of tourism of Delhi, to the convention.

Claiming that tourism creates 89 jobs for every Rs one million spent against 45 jobs in agriculture and 13 jobs in manufacturing sector, Shetty said that the hospitality sector could bring Rs 250 billion of foreign exchange annually if India achieves the targeted figure of 3.5 million tourists by 2003.

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