Hoteliers seek tax exemption, VAT reduction


Srinagar, Feb 5: The Valley-based hoteliers have demanded that no fresh tax should be imposed on the hospitality sector in Kashmir.
 Representatives of Kashmir Hotels and Restaurant Association (KHARA) and Kashmir Hotels and Restaurant Owners’ Federation (KHAROF) raised this demand during pre-budget discussions with Finance Minister Abdul Rahim Rather, on Monday.
 The hoteliers demanded that the state government should exempt the hospitality sector from any fresh tax in the upcoming budget to promote Kashmir as less expensive tourist destination.
 KHARA was represented by its president Showkat Chowdhary. He was accompanied by General Secretary Adil Khan, Joint Secretary Abdul Majeed, Publicity Secretary Aaisha Saleem, Vice President Jeelani and Treasure Assadullah.
 KHAROF was led by its President Faiz Ahmad Bakhshi and Joint Secretary Wahid Malik.
 The hoteliers urged the finance minister to announce reduction in the rate of VAT which, they said, was charged at the higher side in J&K.
  “The hoteliers have to import most of the items for consumption from outside the state which increases the input cost. The VAT on sales of food is charged at 5 per cent in Himachal Pradesh and Rajasthan but our state charges 13.5 per cent which further compounds the problem for hoteliers,” said KHARA President Showkat Chowdhary.
 “Government should also keep GST rates low in general and for tourism industry in particular after it is introduced in the state,” he added.
 He said both locals and tourists are unwilling to pay high VAT charges which results in losses to the hospitality sector.
 The hoteliers also demanded exemption from entry tax on goods imported from outside the state besides extending exemption of service and other taxes on room rent.
 “The tourism infrastructure in the state is deteriorating and there is an urged need to upgrade it. We have to import material from outside the state which should be kept free from entry or any other such tax,” said President KHAROF Faiz Bakhshi.
 The hotel associations also proposed modification in the implementation of the package of incentives announced by the government on April 19, 2012 for tourism industry for the upgradation of existing tourism infrastructure.
 According to the packages, the government is providing incentives to new tourism projects applicable in identified areas. Also there is a 30 per cent capital outright subsidy to only those existing hotels and units which will increase bed capacity by at least one third of its existing capacity.
 “We have huge infrastructure which can cater to about 25 lakh tourists annually. But most of the infrastructure is in bad condition because it fell into disuse during past 20 years of turmoil in Valley. We want the subsidy do be announced for only upgrading and maintaining existing infrastructure. Government should therefore amend its package of incentives for hospitality sector,” said hoteliers.
 The hoteliers also reiterated their demand of according full industrial benefits to tourism sector as is available to small scale industries.
 “Government has declared tourism as an industry in 1995 but even after 18 years the benefits of power tariff applicable to small scale industries have not been given to tourism sector. Government should treat tourism sector at par with small scale industries,” said hoteliers.

Lastupdate on : Tue, 5 Feb 2013 21:30:00 Makkah time
Lastupdate on : Tue, 5 Feb 2013 18:30:00 GMT
Lastupdate on : Wed, 6 Feb 2013 00:00:00 IST

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