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Karnataka announces Covid relief package for hospitality sector, ‘beginning push towards revival’, says industry

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) estimated the sector hit by the pandemic-related crisis would require another two years to reach a stage of revival.

Written by Ralph Alex Arakal | Bengaluru |
June 25, 2021 2:04:42 pm
Customers at a restaurant that reopened after further ease in Covid-induced lockdown restrictions, in Bengaluru, Monday, June 21, 2021. (PTI Photo)

The Karnataka government Thursday announced a Covid-19 rehabilitation and relief package for the state’s hospitality industry, responding to the demand put forth by the hospitality association seeking assistance to revive businesses that were hit by the pandemic-related crisis.

Tourism Minister CP Yogeshwar announced hotels and resorts will not have to pay electricity bills for April and May 2021. Further, a 50 per cent temporary concession has been allowed on the annual tax filing as well. “Hotels and resorts can pay 50 per cent of the excise and additional taxes now and the remaining by December 31,” he said.

Terming the Covid-19 rehabilitation package as the “beginning push towards revival”, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) estimated that the sector hit by the pandemic-related crisis would require another two years to reach a stage of revival.

FKCCI president Perikal M Sundar said the sector alone would have contributed to nearly one-third of the total loss of revenue incurred by the trade and business community in the state. “The hospitality sector, which is also closely linked to the tourism industry, has suffered a loss of nearly Rs 25,000 crore since the onset of the Covid-19 pandemic in March 2020. This sector is important as it employs most people followed by the education sector in the state,” he noted.

Sundar said the government, too, had taken a hit due to the prevailing conditions as the loss of revenue in the form of taxes from the sector is estimated to be at around 25 per cent of the total Rs 10,000 crore per month.

Various associations comprising owners of hotels, resorts, restaurants, and the members of the Karnataka Tourism Society had earlier submitted a memorandum to the government seeking assistance.

Bruhat Bangalore Hotels Association (BBHA) president PC Rao, reacting to the announcement, said: “The 50 per cent cut on taxes and the three month-exemption from paying fixed charges is a welcome move. The efforts made by the Karnataka Tourism Society and the FKCCI are highly appreciable.”

Further, Sundar indicated that steps taken by the government towards mitigating an anticipated third wave would also turn out to be a deciding factor for the future of the industries. “As businesses are opening up again with hopes of getting back to feet gradually, we should ensure that a possible third wave should be dealt with in an effective and efficient manner,” he said.

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