Motels in Gujarat have a unique opportunity to benefit from various subsidies and incentives under the state’s Tourism Policy. Whether you’re planning to establish a new motel or expand an existing one, understanding these subsidies can significantly enhance your project’s viability and financial health. Let’s explore the four major subsidies available to motels in Gujarat.

Definition of Motel

A motel refers to a new or expanded motel tourism unit with a minimum capital investment of INR 50 lakh. The unit must also obtain the necessary category certification from the Ministry of Tourism, Government of India, as per the guidelines issued from time to time.

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1. Capital Subsidy

One of the key incentives for motels in Gujarat is the Capital Subsidy. Eligible motels can receive a 15% subsidy on their eligible capital investment. This includes costs related to construction and development, calculated based on specific rates per square foot for different categories of accommodation. For example, a 5-star category accommodation unit can claim INR 3,400 per sq. ft. as eligible capital investment, which translates into substantial financial support.

To qualify, motels must have a minimum capital investment of INR 50 lakh and obtain necessary certification from the Ministry of Tourism, Government of India. It is important to note that only new motel projects are eligible for this subsidy; expansion projects are not eligible.

2. Exemption of Electricity Duty and Reimbursement of Stamp Duty and Registration Fee

The policy offers a 100% exemption from electricity duty for motels for five years. This exemption helps reduce operational costs, making it an attractive benefit for new motels. Additionally, there is a 100% reimbursement of stamp duty and registration fees. This reimbursement applies to all relevant fees incurred during the registration of the property, further easing the financial burden.

3. Subsidy for Green Building and Sustainable Tourism Certification

Motels that prioritize sustainable practices can benefit from a subsidy for obtaining Green Building and Sustainable Tourism Certification. The policy provides financial assistance of up to 50% of the certification fees, capped at INR 10 lakh for Green Building Certification and INR 5 lakh for Global Sustainable Tourism Certification. Recognized certifications include those from the India Green Building Council (IGBC), Green Rating for Integrated Habitat Assessment (GRIHA), Leadership in Energy and Environmental Design (LEED), and Global Sustainable Tourism Council (GSTC).

4. Market Development Assistance

Motels looking to expand their market presence can avail themselves of Market Development Assistance. This subsidy covers participation in national and international travel and tourism shows. Eligible motels can receive up to 75% of the space rent or INR 1 lakh per event for national exhibitions outside Gujarat, and up to 75% of the space rent or INR 2 lakh per event for international exhibitions. Additionally, for exhibitions abroad, up to 60% of the space rent or INR 5 lakh per event is covered, along with airfare reimbursement up to INR 40,000 per event.

Extended Time Period for Project Completion

The policy outlines different timeframes for project completion based on the capital investment:

1. Capital Investment up to INR 100 Cr.
   • Must commence full commercial operation on or before the last date of the policy period (31st December 2025).
2. Capital Investment between INR 101 Cr. to INR 250 Cr.
   • Must commence commercial operation partially during the policy period and complete the project within 6 months after the policy period ends.
3. Capital Investment between INR 251 Cr. to INR 500 Cr.
   • Must commence commercial operation partially during the policy period and complete the project within 12 months after the policy period ends.
4. Capital Investment of INR 501 Cr. and above
   • Must commence commercial operation partially during the policy period and complete the project within 18 months after the policy period ends.

General Conditions for Availing Benefits

1. Commencement of Operations:
   • The tourism project, including motels, must commence full or partial commercial operations during the operative period of the policy (from 1st January 2021 to 31st December 2025).
2. Eligibility for Public Sector Units:
   • Commercial tourism projects set up by state or central Public Sector Undertakings (PSUs) or Boards/Corporations are eligible for these benefits. However, any budgetary support from state or central government bodies or local authorities will not be considered part of the eligible investment.
3. Restriction on Availing Multiple Benefits:
   • Beneficiaries who receive assistance under this policy cannot claim similar benefits from other state government schemes or policies for the same components unless specifically allowed. However, they can avail themselves of similar benefits from government of India schemes if applicable.
4. Cap on Financial Assistance:
   • The total amount of financial assistance, including capital subsidy, reimbursement, exemption, concession, and other forms of support, must not exceed the eligible capital investment. Furthermore, the combined subsidies from both the government of India and the Gujarat state government should not surpass the total capital investment.
5. Registration Requirement:
   • All tourism units seeking to apply for these benefits must register on the official Gujarat tourism portal https://tourism.gujarat.gov.in/.
6. Project Definition and Eligibility:
   • To qualify for financial benefits, the tourism unit must be a standalone project and not part of a shopping mall, complex, or other property/infrastructure.

Conclusion

Gujarat’s Tourism Policy offers a comprehensive package of subsidies and incentives aimed at fostering the growth of motels in the state. By leveraging these benefits, motel owners can significantly reduce their initial and operational costs, enhance their sustainability, and expand their market reach. If you’re planning to establish a motel in Gujarat, now is the time to take advantage of these lucrative opportunities.