Himachal government announces interest subvention on working capital loan for hospitality sector

To provide relief to the COVID-19 affected the tourism sector, the state government has introduced a scheme for interest subvention on working capital loans for the hospitality sector.

The eligibility criteria as well as the magnitude of financing being provided will be based on the unit’s GST payment history.

If the registered tourism unit has paid an average GST up to Rs 1 crore per year, the unit will be entitled to a working capital loan of Rs 50 lakh. 

Hotels and Restaurants in Gujarat want 6-month tax holiday

The Hotels and Restaurants Association (HRA) of Gujarat has sought a six-month tax holiday from the state government, over losses incurred by the tourism and hospitality sector due to the Covid-19 pandemic. In a representation made to the state government recently, HRA Gujarat said the hospitality sector is reeling from a severe working capital crunch.

The hospitality sector needs a lot of working capital which has taken a 90% hit. Paying GST and advance taxes, excise, licences fees, property tax and electricity duty will be extremely difficult. Moreover, several hoteliers had taken loans to construct and run establishments and in such times, timely payment of EMIs will be difficult

The association has sought a tax holiday from GST payments up to March 31, 2021. They have sought that the interest subsidy given to new hotels be extended to existing ones as well. The association also sought an electricity duty waiver for one year. The property tax for 2020-21 should be completely waived while that for 2021-22 should be cut by 50%
The association has also sought a complete waiver of VAT on gas charges.

COVID-19: Hospitality Industry Seeks PM's Help

The Federation of Associations in Indian Tourism and Hospitality (FAITH), the nodal agency and policy federation of all the national associations representing the tourism, travel and hospitality industry has written to Prime Minister Narendra Modi stating the tourism industry is in dire straits because of the COVID-19 pandemic

With declining revenues almost all tourism businesses are running out of working capital

In the letter, FAITH has requested for a complete GST tax holiday for the tourism, travel and hospitality industry for twelve months.

"With almost nil revenues there is hardly going to be any GST collection,"

FAITH said as a result of this pandemic, the Indian tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment. "It is believed that around 70% out of a total estimated workforce of 5.5 crore (direct and indirect) could get unemployed (3.8 crore).This effect of job losses and layoffs has already begun throughout the country," the letter stated.
The federation has also requested for a twelve months' moratorium on EMIs of principle and interest payments on loans and working capital from financial institutions besides a doubling of working capital limits on interest free and collateral free terms."This will prevent all our tourism businesses from going bankrupt,"

FAITH has also sought a support fund for 12 months on the lines of MNREGA to support basic salaries with direct transfers to affected tourism employees.

Setting up of a national tourism task force under PM's leadership to fast track all tourism investment proposals and to withhold the tax collected at source (TCS) on travel provision proposed in Finance Bill 2020 which is to be introduced from April 1.FAITH believes TCS on travel will displace business from India to overseas markets

A deferment of twelve months for all statutory dues

Release of SEIS and EPCG schemes on an urgent basis based on last year's submissions of foreign exchange earnings of companies at an enhanced rate of 10%, GST refunds on MICE cancelled events, a six to nine months' moratorium on all working capital principle, interest payments on loans and overdrafts bringing in liquidity