Newstrack

Gujarat announces major incentives for hospitality investors

Reema Sisodia - Ahmedabad

After keeping low for over two years, Gujarat tourism has made a re-entry with a more focused marketing and investment friendly proposal and incentives. Following the footsteps of other state tourism boards, Gujarat tourism has announced plans to invite private players to operate the state-owned hotels.

To facilitate further growth in the hospitality sector, the state has completely exempted new investors, who are interested to take up tourism development work and projects, from three taxes namely luxury tax, entertainment tax, stamp duty and electricity duty. The government has also reduced luxury tax by 40 per cent and have completely exempted those hotels who have a tariff of up to Rs 500, which was earlier exempted for those who had a tariff of Rs 200. Previously, the state luxury tax scenario was broken into three slabs:

• Hotel tariff from Rs 200 to Rs 400: 6 per cent luxury tax
• From Rs 400 to Rs 600: 10 per cent luxury tax
• Rs 600 plus: 15 per cent luxury tax

Under the revised scheme there are two slabs:

• Hotel tariff from 500 to Rs 2,000: 5 per cent luxury tax
• Rs 2,000 plus: 8 per cent luxury tax on 50 percent plus occupancy or 12.5 per cent on actual for those whose occupancy is less than 50 per cent.

The state has also reduced entertainment tax from 50 per cent to 25 per cent and electricity duty from 35 per cent to 30 per cent.

Speaking about the new development and the proposals for investment, C D Patel, minister of state for tourism, government of Gujarat and P D Vaghela, managing director, Tourism Corporation of Gujarat Limited, told Express Hospitality, "We are extremely keen to boost public-private synergy to improve tourism in the state. We are looking for more private players to invest and are trying our best to make investment attractive. We also aim to give our hotels to private players to run the show as they are the ones who have the expertise."