New Delhi, Feb. 28: The annual budget for fiscal 2003-04 filled the tourism and hotel industry, one of the highest forex earners, with a feeling of excitement and fulfilment. “We are extremely satisfied and happy with this budget which has taken just the right steps of reform for the industry. The industry just could not expect for more,” Shyam Suri, secretary general of the Federation of Hotel and Restaraunt Association of India (FHRAI) told The Telegraph.
The biggest booster was the decision to remove the two-year freeze on leave travel concession (LTC) for government employees. The move is expected to benefit the tourism industry which faced a major slowdown post-September 11, 2001 incident.
The incentive package announced for the industry has proposals including withdrawal of expenditure tax and extension of the benefit of section 10 (23G) to financial institutions that advance long-term capitals to hotels in three-star and above categories.
Suri said, “The hotel industry has been given the status of infrastructure for some of the incentives. FIs which have a infrastructure capital fund will get the incentives under section 10 (23G) of IT ACT for lending to hotels on the same lines as available to them for lending to other infrastructure sectors”.
The package includes the benefit of set-off of unabsorbed loss and depreciation on amalgamation which will be available to hotels under section 72 A of the income-tax Act.