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Thumbs up for tax holiday for NCR hotels
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New Delhi
Mar. 1
The announcement of the Finance Minister, Mr P. Chidambaram, to not only provide a five-year tax holiday for two-, three- and four-star hotels but also conventions centres seating a minimum of 3,000 people in and around Delhi, has been welcomed by real estate developers and major hotel chains.
Presenting the Union Budget 2007-08, the Finance Minister said that the proposed five-year holiday from income tax was being given to boost infrastructure development in Delhi and the surrounding areas ahead of the 2010 Commonwealth Games.
"The projects should be completed and begin operations in the National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar during the period April 1, 2007 to March 31, 2010," Mr Chidambaram announced.
Welcoming the announcement, the Chief Executive Officer of Choice Hotels, Mr Vilas Pawar, said it would encourage entrepreneurs and real estate owners to invest in mid-market hotels. "This would take care of the demand-supply imbalance and result in additional supply of rooms, which in turn would help level the rising hotel room rates," Mr Pawar said.
The Executive Vice President of Carlson Hospitality, Asia-Pacific, Mr K.B. Kachru, said that the Group would have a re-look at its strategy and look at further development of some brands.
The Chairman of Ansal API, Mr Sushil Ansal, felt that the Budget proposals would help the sector grow. The Chairman of Parsvanth Developers Ltd, Mr Pradeep Jain, felt that the Budget proposal would help improve the top and bottom-line in the company's balances sheet.
The Managing Director of Thomas Cook (India), Mr Madhavan Menon, felt that the participation of venture capitalists in development of hotels and convention centres would also help meet the shortage of rooms in the hospitality industry.
Mr Ganesh Raj, Partner and National Leader of Real Estate Practice, Ernst & Young, however, felt that the five-year tax exemption given to hotels in the National Capital Region was not significant as the minimum gestation period of a hotel is three-four years.
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