Hoteliers lose MICE business due to unavailability of ITC under GST

Rishi Puri, Vice President, Lords Hotels & Resorts

The hoteliers are facing tough time to conduct Meetings, Incentives, Conferences, and Events (MICE) business due to newly implemented Goods & Services Tax (GST). Most of the tour operators (businesses) are not confirming their pre booked MICE events. The tour operatos are in dilemma as they would not receive Input Tax Credit (ITC) under the GST outside of their GST registered states.

 

One of the senior officials from leading Event Management Company on the condition of anonymity said “MICE events are organised two to three years in advance. We block the venues by paying token deposit which comes out to Rs 5 to 10 Lakh per event. Due to non clarity on ITC, we are not confirming any bookings for pre-booked MICE events in many hotels. We are in do or die situation as we are not confirming our bookings with hotels, so our deposit will be forefitted to the tune of Rs 70 to 80 laks”.

 

One of the General Manager of leading hotel in Mumbai on the condition of anonymity said “We were doing good business in last few months but suddenly MICE business is stopped as many tour operators are sitting idol on MICE bookings. Not only tour operators but we are also at loss as we refused bookings for particular days to other guest as we were pre-booked by event managers. Now they are on cancelling spree and we are also feeling heat”.     

   

Rishi Puri, Vice President, Lords Hotels & Resorts highlighted on MICE issue said “Businesses or enterprises hold MICE events in different regions because those regions may be their markets or they may have some strategic tie-ups there. To host MICE or related events becomes necessary for such enterprises to conduct their business without having to operate from that particular region. In not being able to receive an Input Tax Credit (ITC) under the Goods & Services Tax (GST) will act as a deterrent in conducting such a practice which is directly bad for business. Not only is it bad business for one such enterprise but it’s bad for the hospitality industry too”.

 

Puri further elaborated “We have been receiving enquiries for hosting MICE and on realizing that they won’t receive the ITC, in case where they are registered in a different State, they are not confirming it. We have lost on approximately 8 per cent MICE bookings since the beginning of the month. We have invested quite a lot in installing state of the art equipment and infrastructure for hosting MICE at our hotels. Loosing potential business because of this ITC anomaly will translate into big losses for us. We feel that the Government may have overlooked this aspect while charting out the GST for hospitality. We hope that it is reconsidered and a provision be made so that all affected stakeholders continue to carry on conducting business as usual”.

Written by Sitaram Mewati

Author: Sitaram Mewati

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