Hoteliers Seek Help on Loan Deferment Amidst Covid-19 Crisis

The hotel industry witnesses significant financial losses due to the impact of the Coronavirus (COVID-19). With an aim to counter the spread of the deadly virus, a majority of the conferences have been postponed indefinitely; marriage and banquet reservations have been cancelled too. Therefore, hotel owners have requested for deferment of their bank loans as well as payment of statutory dues. They have also pursued a GST (Goods and Services Tax) holiday until the industry resumes to the revival route.

J K Mohanty, Co-Chairman of the National Council of Ficci Tourism and Chairman (Eastern Region), and Indian Association of Tour Operators (IATO) have written to the Prime Minister with this regard in a memorandum. Hotel owners are of the opinion that with the present situation, it’s likely that payment of interest and EMIs (Equated Monthly Instalments) concerning their bank loans will be a difficult task to accomplish. Hence, hoteliers are requesting the banks to delay their EMIs as well as interest payments until the situation is back to normal. 

Also Read: COVID-19 lockdown: Businesses need GST return filing extensions

The Co-Chairman has also mentioned that a CIBIL (Credit Information Bureau Ltd) score must not be affected in the present business environment. He also added that similar measures have been implemented already by countries such as China, United States, etc. The hotel industry believes that central government initiatives like these would assist the hospitality and travel industries at this challenging time of crisis.

The Co-Chairman has also called for the quick sanction of funds under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for employees who are working in the tourism sector until revival occurs. In order to facilitate hassle-free recovery for hotel owners and travel businesses, Mohanty has also advocated a GST holiday for the following 12 months.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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