GST Without ITC Hits Small Hotels Hard, Says FHRAI at 69th AGM

FHRAI urges Centre to restore Input Tax Credit, simplify compliance, and grant Infrastructure Status to revive domestic hospitality sector

At its 69th Annual General Meeting held in New Delhi, the Federation of Hotel & Restaurant Associations of India (FHRAI) called for urgent reforms in India’s tourism taxation policy, particularly the restoration of Input Tax Credit (ITC) under the Goods and Services Tax (GST) framework.
Representing over 1 lakh hotels and 5 lakh restaurants nationwide, FHRAI warned that GST without ITC is undermining the affordability and growth of the hospitality industry especially among the 90% of hotels in India that charge below ₹7,500 per night.

The newly elected FHRAI President, Mr. Surendra Kumar Jaiswal, led a press briefing at Le Meridien, stating that the 5% GST without ITC has escalated unrecoverable costs across rentals, electricity, outsourced staff, and capex. “We’re not asking for concessions we’re asking for parity and clarity,” he said, emphasizing that the withdrawal of ITC poses a serious threat to investment and regional tourism development.
Mr. Jaiswal also addressed ongoing copyright-related challenges. He highlighted that overlapping royalty demands from multiple societies are putting unjust legal and financial pressure on hotels and restaurants. He called on the government to streamline copyright collections and shield establishments from litigation through better-defined regulatory roles.

A central demand of FHRAI is for the hospitality sector to be granted both Infrastructure Status and full Industry Status. This, Jaiswal argued, would unlock access to low-interest capital, support tier-II and tier-III growth, and align with India’s goal of becoming a global tourism powerhouse under the Viksit Bharat 2047 vision.
In a notable social outreach initiative, Mr. Jaiswal recognized farmers as the backbone of the hospitality ecosystem and pledged to forge closer connections with the agricultural sector to promote inclusive growth.

The hospitality sector is not just about rooms and meals, it is about people, jobs, and community. With the right support, this industry can become a powerful engine for India’s socio-economic development, Jaiswal concluded.
FHRAI ended the AGM with a strong appeal to policymakers: restore ITC, simplify licensing, implement a single-window clearance, and resolve copyright ambiguities or risk losing both domestic and global competitiveness in hospitality.

At Prittle Prattle News, we honor your dedication and inventiveness led by showcasing you in a positive light. Under the direction of Editor-in-Chief Smruti Bhalerao, our platform is committed to disseminating powerful narratives that raise awareness and motivate change. For more important stories, follow us on LinkedIn, Instagram, and YouTube.