The Maharashtra government has formally accorded “industry status” to the hospitality sector.
The status was actually accorded to the sector back in 1999 due to the continuous efforts of the Federation of Hotel and Restaurant Associations of India (FHRAI) and the Hotel and Restaurant Association of Western India (HRAWI) but had unfortunately remained only on paper and had no meaningful benefits.
However, effective from April 1, 2021, hospitality as an industry will be levied tariffs and duties on electricity, water, property, development and non-agricultural taxes at industrial rates.
“The Cabinet has approved the “industry status” proposal for hotels in Maharashtra. This is a landmark moment for the hotel industry. After reduction of pre-establishment licences from 70 to 10, industry status will give much-needed support to hotels,” tweeted State Tourism, Environment and Protocol Minister Aaditya Thackeray.
The HRAWI and FHRAI have welcomed the move and thanked the Government in aiding the revival of the sector.
“The status had remained only on paper for over two decades but now with its implementation, hospitality will be entitled to receive benefits under special schemes and subsidies, with minimal to none procedural roadblocks,” says Sherry Bhatia, president, HRAWI.
“With its implementation, the operating cost of hotels and other tourism-related sectors will drastically come down due to lower annual electricity rates and other land-related rates. The industry is hopeful that apart from the first stage of benefits, the Government will issue various other benefits listed in the GR, which would help alleviate to some degree the huge burden being felt post-Covid-19,” says Vivek Nair, past president, FHRAI.
“The industry status unburdens the sector of utility payments and duties to the State which were at commercial tariff rates. This includes some of the high-cost items like electricity, water and property, among others. At industrial rates, the operational costs will go down to a great extent. This is a big relief for our sector and has come at a time when hotel and restaurant businesses are severely hit because of the pandemic enforced lockdown and low consumer confidence,” says Gurbaxish Singh Kohli, spokesperson, HRAWI.