The Federation of Hotel & Restaurant Associations of India (FHRAI) has cautioned that the Goods and Service Tax (GST) framework without Input Tax Credit (ITC) is hurting the affordability and accessibility of India’s tourism and hospitality industry. The statement came during the association’s 69th Annual General Meeting in New Delhi, where its newly elected President, Surendra Kumar Jaiswal, outlined his vision and pressed for urgent reforms.
Mr. Jaiswal noted that nearly 90% of hotels in India charge below ₹7,500 per night, and are now subject to 5% GST without ITC. He stressed that while the revision aimed to benefit consumers, it has instead increased unrecoverable costs for hotels, particularly in Tier II and Tier III cities. The withdrawal of ITC has raised expenses on rentals, utilities, outsourced manpower, and capital expenditure, deterring investment and threatening the growth of domestic tourism.
He also flagged copyright challenges, citing harassment from multiple royalty-collecting societies, and called for clear government intervention to prevent overlapping demands and unjustified litigation.
FHRAI reiterated its long-standing demand for Infrastructure and full Industry Status, which would enable low-cost credit, attract investments to smaller towns, and boost regional development. The association also urged reforms for ease of doing business, including streamlined licensing and a Single Window Clearance System.
“Our industry is not seeking concessions but fairness, clarity, and parity,” Mr. Jaiswal said. “Restoring ITC, resolving copyright ambiguities, and granting industry status are crucial to realizing the Viksit Bharat 2047 vision and positioning India as a global tourism hub.”