Finance minister Nirmala Sitaraman will be presenting the union budget 2022-23 on 1st February. The individuals and the businesses are eagerly awaiting the reforms for this financial year. Last year’s budget focused on healthcare, the stimulus package and rural infrastructure development. This year with the spread of Omicron and reimposition of limited lockdown, the budget expectations revolve around economic recovery, easy compliance, and some relief for the common man.
The hospitality industry, which contributes 9% to the GDP, employs 4.5 crore individuals and provides direct and indirect livelihood to 16 crores people, is one of the hardest-hit industries due to the pandemic. The industry expects special schemes from the budget like interest-free loans, subsidies and tax reliefs to get back on its feet.
Hospitality Industry relief package requests
The demand for special relief packages has received backing from many Hospitality Industry heavyweights. Managing Directors of Clark Hotels and Resorts has recently quoted. The government supported us, but more needs to be done in terms of offering interest-free loans, subsidies, reduction in tax structure, which will help in the recovery and covering up the previous losses”. Also bringing corporate booking and MICE travel under IGST. This step will allow corporates to avail GST inputs, encouraging travel within India rather than opting for cheap Southeast Asia destinations.
The Co-Founder of Brij Hotels, Anant Kumar said that the non-uniform structure of GST should also be considered as it creates massive confusion among the Hospitality and Food Industries. This measure can reduce the complexity and enable MSMEs to focus on core business areas.
Tax relief, better infrastructure and incentives.
The Federation of Hotel and Restaurants Association of India (FHRAI), a hospitality body,has asked the government to add the F & B sector to the National Infrastructure Pipeline (NIP). This move could help pandemic-stricken business, other measures include loans at lower interest rates and longer time for repayment.Other significant demands from the FHRAI include availing Service Export from India Scheme (SEIS) status, grant export status, grant infrastructure status to the hospitality industry and provision of special tax incentive industry to the domestic travel.
The food industry also has expectations from the Union Budget for the growth of food processing industries. The AIFPA gave suggestions that the production can be boosted if the government increases the plant and equipment Depreciation Rate and assures the procedure of simple tax. The request also includes schemes for ‘Pending VAT Refunds’ and ‘GST Input Credits’ so that the industry can get the liquidity it needs. For lower investment, a Production Linked Investment Scheme should be set up. AIFPA also demanded a lower tax of around 5% on Snacks, Ready-to-eat foods, Instant Food Mixes, and traditional foods.
The right steps of the government will help the industry to grow and fill the gap caused by the pandemic in the last two years. The suggestions provided by the industry will encourage the people and investors to invest and will help to have a quick revival of the industry and domestic operations.