§  The
t?uri?m ?nd h??pit?lity indu?try in indi? h?? been witne??ing ? he?lthy gr?wth ?nd
????unt? f?r7.5% ?f the GDP ?f the ??untry. ????rding t? ? KPMG rep?rt, the h??pit?lity
?e?t?r i? expe?ted t? gr?w ?t 16.1% ??GR ?nd will re??h R?. 2,796 th?u??nd ?r?re
in 2022. With ?n in?re??ing middle ?l??? ?nd di?p???ble in??me, thi? ?e?t?r h??
been witne??ing ? p??itive gr?wth f?r ? few ye?r?. The ?e?t?r i? ? m?j?r j?b pr?vider
??r??? the term?, dire?tly ?? well ?? indire?tly. it ?l?? ?ttr??t? the m??t FDi
infl?w ?nd i? ?n imp?rt?nt net f?reign ex?h?nge e?rner f?r the ??untry. The h??pit?lity
?e?t?r i? ? m?j?r ??ntribut?r t? the indire?t t?x revenue? ?t the ?t?te ?? well
?? the ?entr?l level, whi?h in?lude? revenue? fr?m ?ervi?e T?x, V?T ?nd Luxury
T?x. 1

§  The
t?uri?m ?nd h??pit?lity ?e?t?r i? ?m?ng the t?p 10 ?e?t?r? in indi? t? ?ttr??t
the highe?t F?reign Dire?t inve?tment (FDi). ????rding t? the d?t? rele??ed by
Dep?rtment ?f indu?tri?l P?li?y ?nd Pr?m?ti?n (DiPP), the h?tel ?nd t?uri?m ?e?t?r
?ttr??ted ?r?und U?$ 9.2 billi?n ?f FDi between ?pril 2000 ?nd M?r?h 20162

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§  The
h?tel indu?try in indi? thrive? l?rgely due t? the gr?wth in t?uri?m ?nd tr?vel.
The Tr?vel ?nd T?uri?m indu?try ??n?i?t? ?f multiple verti??l? whi?h in?lude h?tel?,
?irline?, ?nd tr?vel & t?ur ??mp?nie?. H?wever,thi? rep?rt f??u?e? ?nly ?n
the H??pit?lity ?e?t?r. Due t? the in?re??e in t?uri?m with ri?ing f?reign ?nd
d?me?ti? t?uri?t?, h?tel ?e?t?r i? b?und t? gr?w. There i? ?n emergen?e ?f
budget h?tel? in indi? t? ??ter t? the m?j?rity ?f the p?pul?ti?n wh? ?eek ?ff?rd?ble
?t?y. intern?ti?n?l ??mp?nie? ?re ?l?? in?re??ingly l??king ?t ?etting up ?u?h
h?tel?. imb?l?n?e in in?re??e in t?uri?t? b?th d?me?ti? ?nd f?reign n?t been ?upp?rted
with equ?l number ?f r??m? i? ? l?tent ??ur?e ?f ?pp?rtunity f?r gr?wth.

§  The
gr?wth in the h??pit?lity ?e?t?r ?nd it? ??ntributi?n? t? the GDP will ??ntinue
t? be ?ub?t?nti?lly higher th?n ?ther ?e?t?r? ?f the e??n?my ?n the b??k ?f
huge t?uri?m p?tenti?l in the ??untry. H?wever, the h??pit?lity ?e?t?r i? ?ne ?f
the m??t he?vily t?xed indu?trie? ?nd i? ??ddled with multiple l?yer? ?f t?x ?u?h
?? V?T, ?ervi?e t?x, luxury t?x, et?. r?nging fr?m 20 per ?ent – 30 per ?ent.
Thi? multiple t?x?ti?n? ?dd? t? ?per?ti?n?l ???t? ?nd redu?e? pr?fit?bility. While
the ?per?ti?n?liz?ti?n ?f the mu?h ?w?ited G?T regime i? expe?ted t? r?ti?n?li?e
the t?x?ti?n ?tru?ture, bring ? p??itive ?ut??me with ?tre?mlined t?xe?, enh?n?e
e??e ?f d?ing bu?ine?? ?nd l?wer ???t f?r the ??n?umer?, there i? ?n urgent
need f?r l?wering the t?x levied, t? in?entivize ?nd ?ttr??t m?re inve?tment? t?
the ?e?t?r.

§  The
h??pit?lity ?e?t?r h?? the p?tenti?l t? be the m?in driving f?r?e behind the gr?wth
?f the e??n?my. it, h?wever, will be p???ible ?nly with the right ?m?unt ?f ?upp?rt
?nd in?entive? fr?m the g?vernment in ?ll ??teg?rie? ?f h?tel? ?nd n?t ?nly limited
t? the luxury ?nd ultr?-luxury ?egment. i believe th?t the g?vernment mu?t pr?vide
it? full ?upp?rt in in?entivizing the ?e?t?r ?nd the ?ver?ll t?x?ti?n ?n the h??pit?lity
?e?t?r ?h?uld be redu?ed t? ?timul?te it? gr?wth ?nd m?ke indi? ??mpetitive
?g?in?t ?ther intern?ti?n?lly ren?wned h??pit?lity ?h?in?

1 http://www.business2business.c?.in/article/821/The-C?ntributi?n-?f-H?spitality-industry-T?-Ec?n?my-Gr?wth

2 https://www.equitymaster.c?m/research-it/sect?r-inf?/h?tels/H?tels-Sect?r-Analysis-Rep?rt.asp


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