Gujarat government offers property tax waiver for restaurants, hotels, resorts & water parks for FY21-22

Property Tax Relief for Gujarat's Hospitality Sector

The Gujarat government's decision to fully exempt hotels, restaurants, resorts, and water parks from property tax for the fiscal year 2021-22 has been met with widespread relief within the hospitality sector. This move comes as a significant boost to an industry grappling with the severe financial repercussions of the COVID-19 pandemic. The property tax exemption follows a period of significant downturn experienced by these establishments during the first and second waves of the pandemic, and is widely anticipated to offer much-needed support.

Revoking Flat Electricity Bills

In addition to the property tax exemption, the state government also declared the revocation of flat electricity bills for these businesses. This means hotel owners, restaurateurs, and water park operators will now only be responsible for paying for the electricity they actually consume, further easing their financial burden.

Easing the Financial Strain on Hoteliers

Jay Sudhakaran, General Manager of Novotel Ahmedabad, expressed the industry's sentiment, stating, "the industry felt neglected due to staff restrictions in companies and hotels that are not considered frontline workers. The news is a welcome change and would help many businesses who are struggling with COVID situation." The announcement is particularly welcome, as it addresses the challenges faced by the industry due to staff restrictions and the impact of the pandemic.

Advocacy by Industry Associations

The decision follows consistent advocacy by industry bodies. Both the Hotels and Restaurants Association (HRA) and the Gujarat Food Entrepreneurs Alliance (FEA) in Ahmedabad submitted representations to the state government, highlighting the sector's plight. On Monday afternoon, HRA representatives met with Chief Minister Vijay Rupani, after which the decision was announced.

Addressing Rising Costs and Revenue Losses

Narendra Somani, President of HRA, Gujarat, emphasized the challenges faced by these businesses: "rising rents, rising operating costs and lack of revenue due to the restrictions have severely impacted the restaurant and hotel businessess. The decision to abolish fixed electricity costs and property taxes will reduce the financial burden on hoteliers." The move directly addresses the financial pressures caused by rising rents and operating costs coupled with revenue losses due to pandemic-related restrictions.