The Hindu Business Line : Hotel industry welcomes Exim policy benefits

THE hotel industry has welcomed the mini Exim policy announcement permitting duty-free imports by the hospitality industry as it would bring down the difference in the rates of food and beverages being charged by five-star and other category of hotels.

According to the policy notification issued by the DGFT, heritage hotels, one and two-star hotels and standalone restaurants have been extended the benefits of duty-free imports admissible to the tourism sector. However, the entire benefits will have to be passed on to the customer.

Reacting to the announcement, Mr Lalit Suri, President, Hotel Association of India, felt that the food and beverage intake in the categories covered in the policy is likely to go up. "The discrimination between the rates charged by the five-star hotels and other categories would decrease and it would encourage foreigners to use these hotels," he said.

The Secretary-General of the Federation of Hotels and Restaurants Associations of India, Mr Shyam Suri, said that the measures announced were very good but felt that the statutory requirement of passing on the price benefits to customers was not a fair one. "We are not happy with the clause that hotels must pass on the concessions to the customer as we are already passing on the benefits to them. This kind of clause has not been fixed for any other industry," he said.

The Exim policy clearly states that hotels, heritage hotels and standalone restaurants approved by the Department of Tourism and other service providers registered with it would be entitled for duty-free imports equivalent to five per cent of the average foreign exchange earned by them in the preceding three licensing years. For one and two-star hotels and standalone restaurants, the foreign exchange earned through international credit cards only shall be taken into account for entitlement under the scheme.

The duty-free entitlement shall be used for import of any capital goods, including spares, office equipment and professional equipment, office furniture and consumables. However, agriculture, dairy products, motor cars, sports utility vehicles and all-purpose vehicles would not be allowed to be imported under the entitlement.