Indian Hotels MD Flags High Taxes for Hospitality Sector

India holds immense potential to attract foreign tourists, but it is lagging severely, Indian Hotels Company Limited MD and CEO Puneet Chhatwal said on Friday, asserting that high tax rates were a key impediment in creating global brands for the country's hospitality sector.

He also sought an "additional push" while referring to the "infrastructure" status accorded to 50 tourist destinations in this year's Budget and reiterated the long-standing demand for an "industry" status.

Alluding to the lack of competitive advantage in terms of margins, the Indian Hotels Company Limited (IHCL) MD and CEO said, "If you are the highest taxed sector in every possible way, GST, excise, paying all charges during COVID when your business is shut with the least amount of budget for promotion, for marketing the destination and just relying on what we have, then how are you going to create those kind of global brands on your own".

Speaking at CII's Annual Business Summit, Chhatwal said India is not just a market of scale but a market of aspiration. It is where the next 500 million middle-income travellers will emerge and their disposable income, coupled with global travel ambitions, will position India very differently within the country and across the globe. In an apparent reference to Finance Minister Nirmala Sitharaman's budget speech, he said, "We at least got infra status for those 50 destinations which we have been fighting for, including industry status, which is a state subject. Collectively, all the associations have worked well to get to where we are, but now where we are, we need that additional push".

In her Budget speech on February 1, Sitharaman stated that the top 50 tourist destination sites in the country will be developed in partnership with states through a challenge mode. Land for building key infrastructure will have to be provided by states.