What is the import duty exemption granted by the Government of India to the hotel industry?
In June 2003, the Government of India allowed all hotels earning foreign exchange a duty-free import licence, whose value was pegged at 5% of their foreign exchange earnings in the three years preceding the year in which the licence was sought. The scheme is administered by the DGFT, or the Directorate-General of Foreign Trade, which functions under the Ministry of Commerce. The Ministry of Commerce, in the subsequent year, extended this scheme to free-standing restaurants, but the value of the entitlement was limited to 20% of their international credit card transactions. This doesn’t amount to much because most restaurants earn in rupees, even from foreign guests and tour groups, unlike hotels, which take only hard currency payments for rooms booked by international visitors.
