Sharath S. Srivatsa

Allocation to sector has increased to Rs. 204 crore this year

Increase of luxury tax on room rent decried

Increase in quarterly tax on stage carriages from Rs. 700 to Rs. 1,000 will affect tourist buses

BANGALORE: Though the allocation to the tourism sector has seen an increase and sops have been announced to improve infrastructure at tourist destinations, the budget has not outlined specific projects, with an exception to Hampi. The industry is naturally disappointed.

The budgetary allocation to the sector increased from Rs. 180 crore in 2009-2010 to Rs. 204 crore for 2010-2011. While a theme park to reflect the glorious traditions of the Vijayanagara Empire has been announced at a cost of Rs. 50 crore, Rs. 5 crore has been allocated for infrastructure development in Sringeri.

With private participation, tourist spots will be developed at important tourist sites in every district.

Besides, the tourism industry will now be permitted to purchase up to five acres of agricultural land at 100 selected tourist centres for construction of hotels, and will receive concessional loan at the rate of 10 per cent from the Karnataka State Finance Corporation. VAT exemption will also be given to such enterprises for a period of three years.

“We had asked for exemption of luxury tax on hotels charging less than Rs. 500 rent However, Government has ignored our plea. Instead it has increased luxury tax on room rent costing Rs. 1,000 and above,” Bruhat Bangalore Hotels' Association President K.N. Vasudeva Adiga said.

Luxury tax

The luxury tax rate has been increased from 6 to 8 per cent for hotel room rents ranging between Rs. 1,000 and Rs. 2,000, and from 10 per cent to 12 per cent for rooms with a daily rent of more than Rs. 2,000.

Stating that the budget may not help in tourism promotion, Mr. Adiga felt that the luxury tax could have been reduced to help hotel industry, which in many cases are not reporting even 50 per cent occupancy rate.

Quarterly tax

The increase in quarterly tax on stage carriages covered by special permit from Rs. 700 to Rs. 1,000 will affect movement of tourist buses from neighbouring States to Karnataka, said K.S. Tantri, President of Bangalore Tourist Taxi Owners' Association. The travel industry is already in a crisis, and this would further add to its woes, he added.