Government should immediately open online applications for hotels to claim the benefits under SEIS for FY 2019-20: HAI

As the Hospitality & Tourism industry struggles to cope with the devastating impact of the Covid-19 pandemic, hotels continue to look for a glimmer of light at the end of the tunnel. The Reserve Bank of India has recognized tourism as one of the most severely impacted sectors. With almost no guests, close to zero revenues and high fixed costs, hotels are struggling to survive while also saving jobs and livelihoods. In spite of such odds the Hotel Association of India (HAI) has highlighted that its member Hotels have worked alongside the government in the fight against the pandemic by preparing millions of food packets for frontline Covid workers & migrants, offering safe & hygienic accommodation not only to doctors and sanitary workers but also to stranded Indians repatriated under the “Vande Bharat” initiative.

The hospitality industry is facing an existential crisis due to lockdown and the ongoing pandemic. The sector is relying heavily on the support and favourable policies of the government for its recovery.

“We are grateful to the Directorate General of Foreign Trade (DGFT) for providing benefits to hotels under the Service Exports from India Scheme (SEIS) of the Foreign Trade Policy (FTP). The process for applying for the reward is online and normally commences in the month of May each year. For the fiscal of 2019-20 therefore, the hotels were looking forward to applying for the benefits in May 2020. However, it has not yet been operationalized. While these are unprecedented times and some delay is acceptable, it has now been stretched for six months. In order for the hotel industry to survive through the global health crisis, these benefits need to reach the hoteliers while there is still time.

“We appeal to the Government of India to make the online application process available to hotels. These benefits are offered to hoteliers as a fixed percentage of their annual net foreign exchange earnings. The incentive enables hotels to subside input costs of imports and facilitates Indian hospitality to match global standards of hotels that a foreign tourist is accustomed to. Given the hardship that hotels are going through since March, this delay may prove to be a crippling injury to an industry that is struggling with a force majeure scenario. The request to allow the hotels to avail the SEIS benefits that have already accrued to them for the year 2019-20 is fair and legitimate and should be acceded to. It is not a concession, said Madan Prasad Bezbaruah, Secretary-General, Hotel Association of India (HAI)

HAI has urged the government to look into the matter urgently and has submitted a representation to Directorate General of Foreign Trade (DGFT) to this effect. They claim that the process will go a long way in providing some relief to the hospitality sector which has been heavily burdened with high fixed costs of salaries, utilities, and licenses, etc.