MYSTIC EAST unexplored horizon A bi-monthly magazine by HRAEI | Vol 2 | Issue 1 | January - February 2016 PPL IPRS Novex Winflex & many more... COVER STORY PLAY, PAY OR FACE THE MUSIC? Hospitality Industry versus Collecting Societies DIRECTOR'S NOTE January - February 2016 Dear Fellow Members, MYSTIC EAST The tourism and hospitality sector in the A BI-MONTHLY MAGAZINE BY HRAEI country felt grossly neglected in the Union Vol 2 | Issue 1 | January - February 2016 Budget 2016. As we help earn the country a large chunk of foreign exchange, we de- served some tax cuts and incentives.On EDITORIAL BOARD the contrary, the service tax got increased SUDESH PODDAR to 15% from 14.5% in the Budget. PRESIDENT, HRAEI 'Krishi Kalyan Cess' at 0.5% will be levied RAVINDRA KUMAR KASHUKA on all taxable services, aimed at improve- MANAGING COMMITTEE MEMBER, HRAEI ment of agriculture and welfare of farm- SUBORNO BOSE ers. But eventually this will lead to all paid MANAGING COMMITTEE MEMBER, HRAEI services becoming dearer. Service tax has GOPAL DAS AGARWAL been consistently increasing over the past VICE PRESIDENT, HRAEI few years; it stood at 12.36% in 2013-14. The Prime Minister had promised a lot EDITORIAL CONSULTANT on job creation and poverty alleviation SUSMIT BARMAN Even though prior to the budget and the tourism and CHIEF DESIGNER hospitality sectors were the best engine to SOMU DUTTA the tourism and achieve this. Yet the Budget failed to offer these incentives to us. hospitality sector ‘Mystic East’ magazine is printed Finally, an increase on the excise duty and published by Atikram Gupta on behalf of Hotel helps earn the country on Aviation Turbine Fuel from 8% to 14% and Restaurant Association of Eastern India. will have some adverse impact on the sec- a big chunk of foreign Printed at CDC Printers Private Limited, No.45, tor. In short, this Budget is a big letdown Radha Nath Chowdhury Road, Tangra Industrial exchange, tax burden for us. Estate-II, Kolkata, West Bengal 700 015 on us rose from 12.36 Hotel and Restaurant Association of Eastern India, % to 15 % since 18A/1, Everest , 18th Floor, 46C, 2013 Chowringhee Road, Kolkata- 700 071; Telephone- +91 33 2288-1742/43, 40035993. Sudesh Poddar E-mail: [email protected] President, HRAEI Website: www.hraei.co.in THIS ISSUE OF MYSTIC EAST CONTAINS 56 PAGES INCLUDING COVER AND BACK COVER All information in Mystic East magazine is derived from sources we consider reliable and a sincere effort is made to report accurate information. The publisher regrets that he cannot accept liability for error and omissions contained in this publication that might have crept in inadvertently. Similarly, opinions/views expressed by third parties are not necessarily shared by the magazine. 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The publisher assumes no responsibility for returning any material, solicited or unsolicited, nor is he responsible for material lost or damaged. MYSTIC EAST | 3 SECRETARY’S MESSAGE Dear fellow members, The Union Budget 2016 may not have any direct benefit for the hospitality sector, but there is one silver lining for us. The thrust on infrastructure and rural development in the Budget is good news for the hospi- tality sector as it will open up new avenues for expansion. The Centre has earmarked Rs 2,21,246 crore for infrastructure devel- opment, with Rs 97,000 crore for the road sector, and plans to revive 160 non-func- tional airports at a cost of Rs 50-100 crore each. Strengthening infrastructure will bol- ster India’s position as an attractive tour- ist destination, which will surely benefit the sector in the long run. This will es- Strengthening the pecially enhance regional and last mile connectivity to untapped regions like the infrastructure will North-East and open up fresh avenues for benefit the hospitality expansion for hotel chains. Domestic trav- el, increased connectivity and accessibility sector in the long run. will also give a fillip to outbound domestic This will especially travel from tier-II and III cities, thus of- fering greater growth avenues. However, enhance regional and there are no details about allocation for last mile connectivity the Incredible India campaign, which is also expected to have an implication on to untapped regions expansion plans. like the North-East Also, though infrastructure promises to open up avenues for hospitality, tourism and open up fresh as a sector is not much in focus. The Fi- avenues for expansion nance Minister glossed over this despite the fact that tourism is one of the major for hotel chains foreign exchange earners in the country. Pranav Singh Secretary, HRAEI 4 | MYSTIC EAST INSIDE January - February 2016 Cover Story 26 January - February 2016 PLAY, PAY OR FACE THE MUSIC? HRAEI Corner New Tech Clarity on Service Tax: The Chief Commissioner tells 7 all about tax rates News Union Budget 2016 disappoints the 11 hospitality industry Food apps troubles: Food West Bengal opens up delivery apps are going goodies for hotels and 20 through a course 16 tourism business correction MYSTIC EAST | 5 Inside Analysis 24 With more new hotels, Kolkata braces up for a tariff war Industry seeks parity on taxes on tourism arrivals 32 in India New Trail 42 Tea tourism: North East India's tea trail attracts 35 tourists to heritage Raj-era bungalows New scchemes of tourism: Swadesh Darshan and Prasad schemes have too few spots from Eastern India Food Interview 45 Biryani's long journey: Once a delicacy of the 41 Nawabs is now a favourite of the aam admi Online woes Housekeeping head of Fake review menace: Swissotel, Kolkata, 47 Don't get browbeaten stresses on the importance by review threats from of the department online sites 6 | MYSTIC EAST NEWS January - February 2016 HRAEI CORNER ASSOCIATION SEEKS CLARITY ON REVISED TAX RATES KOLKATA, Jan. 14: Members of concern on non-compliance of the hospitality sector. “The service the Hotels and Restaurants Associ- tax payment by restaurants, event tax rate has been hiked from 12 per ation of Eastern India (HRAEI) met managers and outdoor caterers. Ac- cent to 14 per cent, effective June 1, officials from the service tax depart- cording to him and other service tax 2015. Subsequently, a 0.5 per cent ment to obtain clarity on revised officials, the propensity to avoid tax Swachh Bharat cess has been levied service tax rates, including the im- is prominent especially among the from November 15,” said Sudesh position of the contentious service unorganised institutions that bill a Poddar, the president of HRAEI. Te- charge. hefty amount to the customers but jinder Singh Walia, vice president, In an interactive session with do not disclose the same to the tax Federation of Hotel and Restaurants the members of HRAEI, S.K. Pan- authorities. Association of India (FHRAI), “ We da, the Chief Commissioner, Ser- Members of HRAEI, however, don’t want to evade tax. But we have vice Tax, Kolkata Zone, expressed rued over high service tax burden on concerns over certain aspects, such MYSTIC EAST | 7 NEWS HRAEI CORNER EASE OF DOING BUSINESS We the members of Hotel and Kendriya Utpad Shulk Bhavan, Kolkata Restaurant Association of Eastern In- dia (HRAEI) place on record our deep as imposition of service tax on take- Other officials present at the appreciation for Chief Commissioner, away food and additional beds and meet said a threshold exemption of Service Tax, Kolkata, Sri S.K.Panda service charges billed by hotels and Rs 10 lakh is available for services for his wholehearted effort for making restaurants.” rendered in a financial year. Of- ‘ease of doing business’ a reality in the Service Tax Sector in Kolkata. Mr Panda called for improvement ten institutions miss the benefit of of compliance. He said, “From our the exemption because they do not We urge all our members to avail side we are trying to create awareness. maintain proper documents. Ac- this opportunity and approach his The upcoming Goods and Services cording to Mr Panda recent drives office at Kendriya Utpad Shulk Tax (GST) will also ease some of the undertaken by them have garnered Bhawan, 2nd Floor, 180, Shan- problems as it will provide a mecha- an additional tax of around Rs 100 ti Pally, Rajdanga Main Roda, nism to seamlessly pay tax and get tax crore. The service tax collection in Kolkata—700 017 on any working credit,” said Panda. GST is yet to be the Calcutta zone in 2014-15 was day during working hours if they implemented pending Parliamentary Rs 5,181.39 crore. In 2015-16, the are facing any problem in Service Tax matters. Contact number of approval. “We expect GST to remove collection has already touched Rs his office is 2442-5066. However, of double taxation on rooms (local tax 4,671.91 crore, helped partly by the he is also available for any walk-in and sale tax) and food (value added tax recent drives of the department to visitor.