Assocham for tax holiday for five-star hotels

The Associated Chambers of Commerce and Industry of India (Assocham) has called for a five-year tax holiday for all hotels including five-star establishments, especially in Delhi and the National Capital Region (NCR), in view of the 2010 Commonwealth Games.

'The government has already accorded tax holiday for five years for two-, three- and four-star hotels and even convention centres with a seating capacity of not less than 3,000 in the NCR of Delhi, Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad,' it said in a statement Wednesday.

This facility, according to Assocham, needed to be extended to all categories of hotels so that room capacity expansion takes place to accommodate tourists to India during the 2010 Delhi Games.

It said the infrastructure of the hospitality sector, especially in five-star hotel category in Delhi and NCR where majority of tourists are likely to stay during the event, was inadequate.

'Therefore, their capacities are required to be enhanced in which five-year tax holiday extension scheme would prove a great facilitator,' it said.

'The hotel industry is highly capital-intensive. A new five-star hotel needs investment ranging from Rs.300 crore to Rs.500 crore,' said Assocham secretary general D.S. Rawat.

The chamber also reiterated its demand for infrastructure sector status for the hospitality industry to accelerate the pace of construction of more hotels across the country.