The Telegraph
Since 1st March, 1999
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Red tape spoils hotel party
- Industry status denied despite Rs 200-crore investment

Calcutta, Sept. 25: Buddhadeb Bhattacharjee’s government has failed to crack the mystery of whether a unit in the city on which Rs 200 crore has been invested is a hotel or an industry, a commercial or an industrial unit.

The head-spinning play of words has led to the authorities of Hyatt Regency, the five-star hotel in Salt Lake, not getting some of the concessions due to an industry. The hotel’s commercial operations were kickstarted in August last year.

The administration of the hotel today expressed unhappiness over the treatment the government meted out to it, apart from raising the usual finger at red tape.

“The treatment we received from the government despite investing Rs 200 crore in the state was enough to spoil the morale of an entrepreneur. It (such an attitude) will benefit neither investors here nor the government,” said Prosenjit De, a director of Hyatt Regency, Calcutta.

Though dealing with a government with a proclaimed “do-it-now” motto, the hotel authorities said they failed to disentangle the Writers’ Buildings red tape.

“Inspite of being an industrial consumer and drawing 33 KV, we are being denied the 30 per cent concession on the total energy charges. West Bengal State Electricity Board authorities are saying they do not recognise us as an industrial unit. This is against a state government notification that recognises hotels as industries,” De said.

“We are also being charged (for power) at the rate of commercial tariff, which is higher than industrial tariff,” De added.

The electricity board has lobbed the ball in the court of the West Bengal Electricity Regulatory Commission. The board said only the commission was authorised to review the issue.

The confusion on the status of hotels as industry runs across departments and officials. Commerce and industries department officials said they are not sure how the dispute could be settled.

According to classifications made by the Centre, officials at Writers’ said, hotels belong to the “service sector”. They have not been listed as “industry” and the norm is valid across the country, they said.

“The state government’s notification ought to supersede the central classification. But the government now has to sort out the matter, which is still not clear to us. We have to decide whether Hyatt would get all the concessions applicable to industries,” a senior government official said.

The hotel’s management is also not sure whether its status qualifies it to get sales tax benefits under Incentive Scheme, 1993. Under the scheme, sales tax would be remitted for any industrial unit in its first seven years.

“We cannot be sure about getting sales tax benefits unless the tourism department issues a certificate to the sales tax authorities stating we are enlisted with them. We are still uncertain whether we’ll get the benefits despite starting our commercial operations from August 10 last year,” said a Hyatt official.

The complaints from the hotel are now with chief secretary S.. Roy. The issues raised by the hotel authorities might even be referred to a “high-powered committee” headed by Roy. But De said the embarrassment “is difficult to bear with”.

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