On the occasion of its 69th Annual General Meeting, the Federation of Hotel & Restaurant Associations of India (FHRAI), representing over one lakh hotels and five lakh restaurants nationwide, has drawn urgent attention to the policy challenges confronting India’s hospitality sector. The briefing was led by Surendra Kumar Jaiswal, the newly elected President of FHRAI, who outlined his vision for strengthening the industry and called for immediate Government action to safeguard the future of hospitality, a sector that directly and indirectly supports over 60 million livelihoods.
Jaiswal highlighted that 90 percent of India’s hotels operate below a room tariff of Rs 7,500, and are now subject to a Goods and Service Tax (GST) at 5 per cent without Input Tax Credit (ITC). Although the recent revision in the GST rates is a continued effort to rationalize tax rates in order to benefit consumers, improve compliance and support growth, it, he noted, has turned into an added cost for guests and created structural cost burdens on hotels, particularly in Tier II and Tier III cities.
He stressed that the withdrawal of ITC has escalated unrecoverable costs on rentals, utilities, outsourced manpower and capital expenditure, deterring investments and threatening the growth of domestic tourism. FHRAI called for reinstating ITC at the earliest and issuing a clarificatory circular to remove compliance ambiguities. Beyond GST, Jaiswal also addressed persistent issues of copyright harassment, where multiple societies raise overlapping royalty demands, creating unjustified legal and financial pressures on hotels and restaurants.