India needs to cut red tape and reduce tax rate to boost its tourism sector, said Craig Smith, President and MD, Asia Pacific, Marriot International here today.
Speaking at the India Economic Summit, he said that the objective of GST is good, but a tax rate of 28% was inordinately high.
Under the GST regime, hotels with room rent exceeding ₹7,500 attract tax rate of 28%, while accommodation in any hotel, including 5-star hotels, with tariff less than ₹7,500 per day is to be taxed at 18%.
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When asked about one thing that he would like to see happen in the travel and tourism sector, Smith said: “Cut red tape...it takes so many permits to do anything... it is at every level. It is complicated. I have lived in 13 countries...And the two countries that have always been in my mind ... India and Brazil are the ones which became most socialist ...it is the hardest place to do business,” he said.
Smith said the company has 6,000 hotels across the globe and 100 are in India.
“We, as a company are bullish on India...Tourism helps in creating jobs...We need to work together...You need to pick 4-5 destinations and make them hubs,” he added.
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He further said that steps like e-visa gave a phenomenal boost to the tourism sector in India but pointed out that land and capital continued to remain expensive.
“People should understand that tourism is not luxury, it creates jobs. The country needs to develop five special tourism zones like Jaipur. Kerala and Goa have done so good and they are great examples in tourism, he said.
He further said about 180 permits are required to build one hotel anywhere in India.
“It takes 2 years to build a hotel in Japan...It takes 7 years to open a five star hotel in India. That capital sits and (remains) unused for 7 years...it becomes expensive,” he added.