e-Newsletter
Issue 1, 2014

It’s not just about
‘asking for more’ a la Oliver Twist of Rebates & Tax Reliefs

(L to R) Mr. Rakeash Mathur, Director & Principal Advisor, ZINC Hospitality; Mr. Steve Borgia, Chairman & MD, INDeco Leisure Hotels; Mr. Abhay Mangaldas, Founder & MD, The House of MG; Mr. Anand Kumar, Joint Secretary, Ministry of Tourism, GoI,; Mr. Randhir Vikram Singh, Joint Managing Director, Mandawa Hotels; Mr. Dhunji Kavarana, CEO, ITC Welcome Heritage Hotels; Mr. Girish Oberio, Hony. Secretary, FHRAI

Heritage hotels have issues and problems very different from modern hotels. Although the Heritage Hotels Movement began in 1990 with just 14 hotels, today there are 184 IHHA member properties. Over past 24 years a lot has been achieved by way of facilities, rebates, tax incentives, etc. However – keeping in mind the problems of heritage properties a lot more needs to be done in terms of connectivity, tax rebates, bar license fee, availability of quality power. These points were also raised at the recent 49th Annual Convention of FHRAI for which the IHHA had given a presentation. So we seek the kind indulgence of the union / state governments for the following:

  • Removal of VAT on Service Tax;
  • Electricity should be levied on industrial rates and not on commercial rates (hotels should be treated as an industry).
  • Urban Development Tax and other local taxes are levied on the total property and that too on commercial rates. There should be a special category for heritage hotels and the taxes should be levied only on the portion used of the property.

    A lot more needs to be done for heritage properties, in terms of connectivity, tax rebates, bar license fee, availability of quality power, etc.

  • Bar license should be issued at the district level. In Rajasthan, for instance, all bar licenses are being issued from Udaipur thereby causing huge inconvenience. There could be a similar problem in other states as well. There should be no bar license fees for Heritage Hotels located in rural areas – where bars are not commercial but only a facility to the in-house guests. There are no walk-in customers.
  • Recently Kerala Government has announced the new Excise Policy according to which all hotels except “5 Star” classified will stand to lose their liquor licenses. The Heritage Hotels in Kerala should be entitled to the liquor license as well.
  • Currently, the deduction on Income Tax 35 AD, 80 ID and 80 IB is only on star hotels. It should be applicable to all kinds of hotels, specially to Heritage Hotels.