Tourism Minister seeks roll back of service tax on hotels

The Tourism Ministry has written to Finance Minister Pranab Mukherjee seeking roll back of the proposed service tax on hotels and restaurants as it feels that the measure may have an adverse impact on the sector.

"It (service tax proposal) is a matter of concern for us. I have already written to the Finance Minister to reconsider it," Tourism Minister Subodh Kant Sahai said after a meeting of the National Tourism Advisory Committee here.

The Government had in the 2011-12 Budget proposed to levy service tax on hotel rooms and AC restaurants which have licence to serve liquor. The proposal is strongly opposed by the tourism industry which fears that this will affect the flow of tourists adversely.

Pressing for the rollback of the service tax proposal, Sahai said: "The government and policy makers should realise the fact that tourism sector is a forex and employment generating sector."

India received about 5.58 million foreign tourists in 2010, which is much less than tourist arrivals in China.

"Though the rollback issue does not come in reply in Parliament, I will talk to him (Finance Minister) again," Sahai said.

On poor infrastructure, he said: "We are trying to improve the tourism infrastructure to provide good comfort to tourists. Steps are undertaken to develop more tourist circuits." About his action plan for the sector, he said: "We are exploring the possibilities of developing tourist circuits on a mission mode like JNNURM. If cities'' infrastructure can be developed under JNNURM then the same formula can be replicated in tourism sector also."