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Our Bureau

Chennai, Jan. 10 The Union Government is trying to bring in lower and uniform luxury tax for the hospitality industry, according to Ms Ambika Soni, Union Minister for Tourism and Culture.

Ms Soni asked hoteliers to rationalise tariff rates as high tariff was one of the reasons for foreign tourists by-passing India. “The Tourism Ministry is in talks with the Finance Ministry, the Planning Commission, and State governments to introduce uniform and lower luxury tax,” she said.

The luxury tax now ranges around 5-12.5 per cent in various States.

Presenting the FHRAI’s (Federation of Hotels & Restaurants Association of India) Annual Awards to industry workforce for excellence, she said the Tourism Ministry, as a pro-active measure, is planning to offer subsidies and incentives to the travel trade to bring in more foreign tourists in 2009.

Despite the global slowdown, India registered 8 per cent growth in the arrival of foreign tourists in 2008 against 2 per cent growth globally. “The Government is hopeful of drawing 10 million inbound tourists this year,” she said.

She asked the travel trade and the hospitality industry to focus more on domestic tourism as there was a great potential. On the infrastructure front, the Union Government is exploring various possibilities to improve sanitation and basic amenities through the public-and-private-partnership mode.

Mr M.P. Purushothaman, President, FHRAI, thanked the Minister for her support to the proposal to let hotels raise up to $100 million ECB through the automatic route.

He also appealed to the Ministry to accord ‘infrastructure status’ to the hotel industry. He requested that the Coastal Zone Regulations be liberalised so that the country can benefit as it has a vast coastline and excellent tourism potential.

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