In its pre-budget memorandum to the Finance Ministry, the hotel federation asked permission to carry forward business losses from the current limit of 8 years to 12 years and raise the SEIS entitlement for hotels from 3 to 10 percent.

The Federation of Hotel & Restaurant Associations of India (FHRAI), in their pre-budget memorandum to the Finance Ministry, has asked for reliefs, incentives, and financial support for the sector to overcome the huge financial losses suffered due to the Covid19 global pandemic. The Hotel federation has asked the government to include the hospitality sector in the National Infrastructure Pipeline (NIP) so that the businesses can avail funds at reduced interest with a longer repayment window. As the businesses will take time to recuperate from the Covid19 losses, it also demanded permission to carry forward the losses from the existing eight years to 12 years at least.

We are requesting that hotels and tourism-related sectors be included in infrastructure projects listed in the National Infrastructure Pipeline (NIP) set up under the Development Financial Institution (DFI) by the Ministry of Finance for promoting infrastructure funding. This will enable the Covid hit hospitality sector to avail funds with extended repayment periods at a low rate of interest. The hotel industry is a long gestation industry that incurs losses in the initial years of operations and profitability improves only after a few years. Because of this, most hotels carry forward business losses with the expectation to set them off over the coming years. However, the industry’s profitability took a massive hit due to the unprecedented pandemic conditions and expects businesses to post losses for the next few years. This may result in hotels being unable to set off past business losses within a period of eight years, adversely impacting cash-flow and RoI. Hence, we request that business losses be allowed to be carried forward from the existing 8 years to 12 years,” said Gurbaxish Singh Kohli, vice president, FHRAI.