Government extends five-year tax holiday deadline for Commonwealth Games hotel projects

In a bid to spur growth of the hospitality sector, the government on Thursday extended the deadline for five-year tax holiday from 31March to 31July, 2010. This is expected to benefit about 20 new hotels. The hotels will add about 2,000 rooms to the tally of 30,000 being prepared for the Commonwealth Games.

Tourism minister Kumari Selja had recently written to the finance minister asking for the extension of the deadline following reports that hotel projects were lagging and would not be able to meet the March-end deadline.

Under the budget provisions the five-year tax-holiday available to 3, 4 and 4-star category hotels in NCT of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar (Noida) and Ghaziabad has been extended.

Responding to the announcement, the minister said the development would foster an economic environment which was conducive for the growth of the tourism and hospitality in the country.

The incentive was earlier available during 1 April, 2007 to 31 March, 2010 and has been extended to encourage the completion of Games hotel projects. Progress on the hotel project had suffered due to global economic recession.

"Although these hotels would have been used for the Games they would not have got the tax benefit if the deadline was not extended, as the previous order required them to be operational by 31st March, 2010. Commonwealth Games hotel projects had slowed down following the overall global economic recession," said a statement from the tourism ministry.

With the announcement coming approximately 200 days ahead of the date of the start of the Commonwealth Games, the government hopes the move would encourage the development of new hotels in the national capital region and help meet the accommodation requirements for the games.