| Gurgaon’s
“stars” may soon be shining bright! |
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Some new and interesting changes
are occurring on the hospitality map of India,
with the emergence of the booming BPO city of
Gurgaon as a prominent market for star hotels.
Located at the Haryana end
of the National Capital Region, Gurgaon is attracting
the attention of foreign brands such as the Radisson,
Shangri-la, Intercontinental and Mandarin. Its
proximity to the international airport in Delhi
is proving to be a big advantage. In fact Gurgaon
may see an infusion of 1,000-1,500 star hotel
rooms in the next three to four years. According
to real estate experts, some 25 m sq. ft of commercial
space is being added in Gurgaon over the next
year or two, and that could translate into 35,000
more jobs at various levels.
At present, Gurgaon hosts only
one lead brand, the Trident-Hilton. Gurgaon’s
MNC audience therefore are big business for nearby
star hotels in Delhi, such as The Radisson, The
Grand, Hyatt Regency, Maurya Sheraton, Taj Palace
and Marriott. In the next three months, Park Sarovar
Plaza and ITC Fortune Park hotels are likely to
be opened in Gurgaon. Leading developers, such
as MGF, Vatika Group, Today Infrastructure and
Ambience Island too, are said to be scouting for
suitable land to put up a hotel.
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Our Say |
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| It
is interesting to note that while secondary
cities have mostly seen budget and mid-market
openings, in case of Gurgaon, analysts
foresee a market for more budget and
five star hotels. Many budget brands
are focusing on converting unbranded
hotels, and the number of branded three-star
hotels are expected to even exceed those
in the luxury market in the next few
years, as has been the case in the US
and Europe. Gurgaon’s success
could well spur other cities into growing
their business climate and potential,
which in turn could fuel all round economic
progress.
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| Exporters
to be exempt from various levies! |
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| The commerce
department is planning to ensure full tax exemption
to exporters from all state-level levies and 29
types of cess so that they remain competitive in
the international market.
Such and other measures were a part of the recently
announced National Foreign Trade Policy.
As a major incentive
under this policy, the government is set to grant
exemption from service and central sales tax to
all exporters. So far, the exemption was available
only to units located in the Special Economic Zones.
The rationale behind the move is that since Central
Sales Tax (CST) is a refundable tax, exempting the
tax altogether will simplify existing procedures.
Similarly, the service tax exemption is not expected
to affect revenue earnings of the government.
Presently, units
in Domestic Tariff Areas (DTA) and Export Oriented
Units (EOU) have to pay taxes on any services used
locally by them. Similarly, the central sales tax
has to be paid by the DTA and EOU on any raw material
procured from across states. The proceeds of the
CST is collected by the state but is refunded by
the Centre to the exporters.
Also on the list
are the cess levied on diesel and petrol along with
little-known levies like mica cess, rubber cess,
tobacco cess and tea cess, farm products like spices,
finished leather, etc.
The commerce
department will also seek exemption to exporters
from the recently-introduced education cess and
is planning to encourage state governments to scrap
levies like octroi, sales tax and electricity duty
on export inputs. The Centre is expected to convince
states that they would stand to lose economic activity
and employment if such local taxes continue to deter
exporters.
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Our Say |
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| While
exemption from each individual levy
may not result in a big-bang impact
on costs, the collective impact of relief
from all the levies would act as a booster
to exporters. As of now, they do not
get reimbursement for these levies and
duty drawback is restricted primarily
to excise and customs duties.
In
the particular case of exemption from
Central Sales Tax and Service Tax, this
move will remove the discrimination
between DTA and EOU units. Presently,
only CST paid by EOU units is refunded
while that by the DTA units is not.
There has been a growing demand by industry
players that all the DTA units which
export upto 75 % of their production
should be given the benefits of EOUs,
which will help put DTAs at par with
EOUs.
For
long, exporters have been demanding
remission of state-level taxes like
octroi. While the central government
has not been successful in ensuring
this, many say that introduction of
state-level VAT will improve the situation.
The issue could well be fully settled
once the goods & services tax (GST)
proposed by the Kelkar Committee is
implemented, as the GST package involves
scrapping of all state-level taxes,
excluding user charges. |
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