Types of Subsidies and Incentives available for Hotels and Resorts in Gujarat

Unlocking Opportunities: Exploring Subsidies and Incentives for Hotels and Resorts in Gujarat

Are you planning to venture into the tourism sector in Gujarat or expand your existing tourism project? If so, you’re in luck! The Government of Gujarat is offering a lucrative 20% capital subsidy to hotels and resorts under its Tourism Policy 2021-25. Let’s delve into the details to see how you can benefit from this enticing opportunity.

Eligible Tourism Projects/Units

Firstly, let’s understand what constitutes an eligible tourism project or unit. According to the policy, a tourism project/unit refers to any setup offering facilities and services related to the travel and tourism sector, as defined and approved under the policy. These projects must commence partial or full commercial operations during the policy period and register with the Commissioner of Tourism, Government of Gujarat.

There are two main categories of eligible projects:

1. New Tourism Projects: These are projects set up and commencing commercial operation during the operative period of the policy.
2. Expansion of Tourism Projects: This category includes existing eligible tourism projects that undertake expansion projects of over 50% of their existing capacity and commence commercial operation during the policy period.

Definition for Hotel/Resort

Hotels/Resorts are specifically highlighted under this policy. They refer to new tourism projects or expansions set up in identified high-priority tourism destinations in Gujarat, with a minimum capital investment of INR 1.00 Cr. Additionally, these establishments must obtain necessary category certification as per the guidelines issued by the Ministry of Tourism, Government of India.

Date of Commencement of Commercial Operation

For clarity, the date of commencement of commercial operation is defined as the date of issuance of the first commercial bill after thorough testing, trial running, commissioning, and approval under relevant government rules.

Operative Period of the Policy

The policy is effective from January 1, 2021, and will remain in force until December 31, 2025. Any eligible tourism project that initiates investment or obtains necessary permissions on or after January 1, 2021, is eligible under this policy.

Extended Time Period for Project Completion

Depending on the capital investment, projects have varying timeframes for completion:

• For investments up to INR 100 Cr., full commercial operation must commence before the last date of the policy period.
• Projects with higher investments have proportionally extended timelines.

Time Frame for Filing Application

Eligible projects/events/components must file applications for claiming financial benefits within specific timeframes, particularly for market development assistance and organizing fairs & MICE events.

General Conditions to Avail Benefits

Several conditions apply to avail benefits under this scheme, including the necessity to commence full or partial commercial operation during the policy period and restrictions on availing benefits from other government schemes simultaneously.

• Tourism Project availing benefits under this policy shall commence full or partial commercial operation during the operative period of the policy.
• Commercial Tourism Project set up by state/Central PSU or Board/ Corporation shall also be eligible. However, the amount of budgetary support from state/central government/ local bodies shall not be considered as an eligible investment.
• The beneficiary that has availed assistance under this policy will not be entitled to avail benefit under any other scheme or policy of any other department of state government for the same components, unless and otherwise specific under that scheme /policy. A beneficiary can avail of benefit under such scheme of government of India, if any.
• The sum of the capital subsidy, Reimbursement, Exemption, Concession, and other financial assistance as defined under this policy shall not exceed the eligible capital investment. The sum of the subsidies availed from government of India and/or Gujarat shall not exceed the total capital investment.
• Tourism units who wish to apply under the policy shall be required to register with Gujarat Tourism.
• To be an eligible project for availing the financial benefits, any tourism unit must be a project. i. e., not a part of shopping mall/complex, or any other property /infrastructure.

Incentives and Financial Benefits

Now, let’s explore the incentives and financial benefits that hotels and resorts can avail themselves of under this policy:

1. Capital Subsidy: Hotels and resorts are entitled to a substantial 20% capital subsidy based on eligible capital investment.
2. Exemption of Electricity Duty and Reimbursement of Stamp Duty and Registration Fee: Qualifying establishments can benefit from 100% exemption from electricity duty for five years, as well as reimbursement of stamp duty and registration fees.
3. Subsidy for Green Building and Sustainable Tourism Certification: Projects obtaining green building and sustainable tourism certifications from recognized authorities are eligible for subsidies.
4. Market Development Assistance: Assistance is provided for participating in exhibitions and travel tourism shows nationally and internationally.
5. Payroll Incentive: Payroll assistance is available for appointing tour guides, benefiting both tourism service providers and hotels/resorts.

Extent of the Policy

The policy covers the entire state of Gujarat, subject to prior approval from the Commissioner of Tourism. Various tourism-related establishments are eligible to claim financial benefits under the scheme.

Don’t miss out on this golden opportunity to enhance your hotel or resort business in Gujarat. To apply or learn more about the scheme, visit the official tourism website of Gujarat.

In conclusion, with the generous incentives offered under the Tourism Policy 2021-25, now is the perfect time to invest in the flourishing tourism sector of Gujarat. Seize the opportunity and embark on a journey towards success in the vibrant world of hospitality and tourism!