FHRAI eyes Union Budget for relief

The Federation of Hotel & Restaurant Associations’ of India (FHRAI) has submitted a comprehensive list of recommendations for the upcoming Union Budget 2022 to 23 to the Union Finance Ministry. In the recommendations, the hotel body has outlined some of the much-needed expectations of the hospitality industry.

In its recommendations, the FHRAI has requested that the industry be allowed to carry forward business losses up to 12 years and avail the SEIS/EPCG (Service Exports from India Scheme/ Export Promotion Capital Goods) benefits without any capping or rate reductions. It also expects the Budget to provide an extension on the timeline for export obligations under the EPCG scheme and grant the industry, Export Status; inclusion of hotels and tourism-related sectors in the National Infrastructure Pipeline (NIP); special emphasis on promoting meetings and conferences at hotels due to the pandemic induced setback suffered by them; grant Infrastructure Status to hospitality industry; and provision of special monetary incentives. Gurbaxish Singh Kohli, VP, FHRAI, said, “We are requesting that hotels and tourism sectors be included in infrastructure projects listed in the NIP set up under the Development Financial Institution (DFI) by the Ministry of Finance to promote infrastructure funding. This will enable the COVID-hit hospitality sector to avail funds with extended repayment periods at a low rate of interest. The industry’s profitability took a massive hit due to the unprecedented pandemic conditions and expects businesses to post losses for the next few years. This may result in hotels being unable to set off past business losses within a period of eight years, adversely impacting cash flow and RoI. Hence, we request that business losses be allowed to be carried forward from the existing 8  to 12 years.”

FHRAI has stated that the sector is relying heavily on the favourable policies of the govt. for its recovery. Hotels, witnessed a huge decline in business, post 2007. Occupancy fell by 20 per cent to 40 per cent, and foreign exchange earnings fell over 5 per cent year on year.

The FHRAI has also recommended that special emphasis be given to promoting meetings and conferences at hotels in India. Pradeep Shetty, Jt. Hon. Sec., FHRAI, says, “Incentives should be offered to corporates for organising meetings and conferences at hotels in India. This may include giving partial or full tax exemptions to the corporations on the expenses incurred. This will encourage corporations to hold meetings and conferences within the country, which will be a win-win situation for both. Expenses incurred by corporates for meetings and conferences abroad should not be considered as business expenditure. This will discourage M!CE events abroad and help conserve foreign exchange while boosting the sales of domestic hospitality businesses and generate employment at home. ”

Some of the Recommendations

Allowing hotels to avail the SEIS/EPCG benefits without any capping & rate reductions

Waiver of secondary condition with regard to average FEE under EPCG scheme retrospectively from FY 2007-08 onwards

Extend timeline for Export Obligation under EPCG Scheme & grant Export Status to the Industry

Treat payments by foreigners in rupees as foreign exchange earned for the purpose of the EPCG scheme.

Special emphasis for promoting meetings & conferences in view of COVID impact to business

Granting infrastructure and industry status to the hospitality industry



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