The Finance Minister, Nirmala Sitharaman, chaired a crucial pre-budget conference at North Block in New Delhi on June 25, 2024. The meeting was attended by the Federation of Hotel and Restaurant Associations of India (FHRAI) and other apex associations from the trade and service sectors ahead of Budget 2024-25. During the meeting, FHRAI presented critical suggestions aimed at boosting the tourism and hospitality industry and enhancing India’s tourism potential on the global stage.

Representing the hospitality sector in the country, FHRAI expressed optimism about India’s future as a global tourism powerhouse by 2047. The association proposed essential regulatory changes to support industry growth, emphasizing strategic reforms to address current challenges and unlock growth opportunities aligned with sector targets.

One of the key requests put forward by FHRAI was to grant Infrastructure Status for hotels across all categories and convention centres built at a project cost of Rs.10 crore and above. This move aims to boost the budget segment in the hotel industry.

GST rationalisation was another significant concern highlighted by Mr. Pradeep Shetty, President of FHRAI. The Federation requested a uniform 12% GST rate across all hotels and the delinking of restaurant tariffs from room tariffs. The current system of GST shifting to different slabs in the same hotel on different dates, depending on room rates, creates compliance issues and confusion among the public. Although there is no tax evasion, this confusion has become a major issue for hotels across the country due to notices and demands from the GST department.

Pradeep Shetty remarked, “Granting infrastructure status to hotels and convention centres across all cities is crucial for attracting investments and accelerating growth in the hospitality sector. This aligns with the Prime Minister's vision of tourism having the same potential as agriculture and real estate. We are encouraged by the Finance Minister's assurance of support in addressing these crucial needs of the industry.”

He added, “We are confident in the Ministry's commitment to implementing GST rationalization for the hospitality sector. FHRAI remains dedicated to fostering a robust hospitality sector that supports India’s flourishing tourism industry, which has a multiplier effect on the economy and employment generation.”

FHRAI highlighted the significance of efforts under the “Incredible India” campaign and recommended enhancing the budget for tourism branding. They also requested specific measures to promote MICE tourism in the country.

The Finance Ministry acknowledged the concerns of the industry and promised to provide the necessary support to help the sector. The outcome of these discussions is anticipated to be reflected in the next budget, which will strive to expand India’s thriving tourist and hospitality industries.

About the Federation of Hotel and Restaurant Associations of India (FHRAI):

Founded in 1955, the Federation of Hotel and Restaurant Associations of India (FHRAI) is the apex body of the Indian hospitality industry and the third-largest hospitality association in the world. FHRAI serves as the leading voice of the hotel and restaurant industry and plays a pivotal role in supporting the growth trajectory of India’s hospitality and tourism sectors. The association provides a vibrant interface between the hospitality industry, government, regulatory bodies, academia, international organizations, civil society, and the media.