With an object of making Gujarat one among the top five tourist States of India in terms of local, national and international tourist footfalls by 2025, the state government has announced many incentives / subsidies schemes for tourism industries. To encourage tourism units like Hotel, Motels, Resorts, water parks, amusement parks etc the Gujarat Government has declared thirteen different types of subsidy / incentives to the tourism industry. The following topics are covered here to understand various the incentive schemes and definitions and procedure to get the benefits.
- Tourism unit covered for Subsidies
- Eligible Tourism Unit
- Subsidy period & coverage
- Types of Subsidies / Incentives / Concessions
- 15% Capital Subsidy to the eligible tourism Units
- 5% to 7% Interest Subsidy to the eligible tourism Units
- Registration / Stamp Duty Concession
- Exemption from Luxury Tax
- Exemption from Entertainment Tax
- Exemption from Electricity Duty
- Support for Sustainable Tourism
- Special Package for Mega Tourism Units
- Incentive for Promotion of Innovation
- Support for Marketing and Promotion
- Skill Development
- Incentives for ICT Enablement
- Assistance for Research in the Tourism/Hospitality Industry
- 5. Essential Conditions for Grant of Incentives
- 6. Definitions of Tourism Unit
- 7. Procedure to get Subsidies
Tourism unit covered for Subsidies
Tourism Unit means a legal entity under the relevant law, engaged or to be engaged in providing any service related to travel and tourism. Following units would be considered as Tourism Units:
(a) Hotels (One-Star to Five-Star Deluxe)
(b) Heritage Hotels
(c) Apartment Hotels
(e) Convention Centers
(g) Tented Accommodation
(h) Tourism & Hospitality Training Institutes
(i) Amusement Parks/ Water Parks /Theme Parks
(j) Adventure Sports
(k) Wayside Amenities
Eligible Tourism Unit
New Tourism Unit and Existing Tourism Unit Undergoing Expansion during the operative period of this Policy would be considered as Eligible Tourism Units.
New Tourism Unit
A ‘New Tourism Unit’ means a Tourism Unit which is set up and which commences commercial operations during the operative period of this Policy.
Existing Tourism Unit Undergoing Expansion
Existing Tourism Unit taking up expansion of more than fifty percent of its existing capacities (e.g. Rooms/Rides/Tents, etc.) Only one expansion project (commencing commercial operations within the Policy Period) of an existing tourism unit will be eligible for assistance during the operative period of the Policy.
Date of Commercial Operations of a Tourism Unit is the date on which the Tourism Unit is open to tourists on a commercial basis, after due testing, trial running and commissioning under relevant Government rules.
Tourism Service Provider
Any partnership firm or private limited company or public limited company or corporation duly registered under law and providing any service related to travel and tourism including Travel Agents, Transport Operators, Ticketing Agents, Tourist Guide Service Providers and Home-stay Owners.
Subsidy period & coverage
This subsidy is available from September 2015 to 31st March 2020 or till the declaration of a new or revised Policy, whichever is earlier. This Policy will supersede any GR/Circular (issued earlier) in contravention of the provisions of this Policy. Coverage Area of the Policy The Policy is applicable to the whole of the State of Gujarat.
Types of Subsidies / Incentives / Concessions
1. Capital Subsidy to the eligible tourism Units
(a) Quantum of Capital Investment subsidy
(b) Additional Capital Subsidy of 5% will be provided to following:-
(i) New Tourism Units coming up within the Corporation limits of Gandhinagar (State Capital) and also adjoining areas falling within the radius of 20 kms but within the District of Gandhinagar.
(ii) New Tourism Units at Yatra Dhams such as Ambaji, Dwarka, Dakor, Junagadh, Somnath, Palitana and such other places as may be recommended by GPYVB and approved by the State Government from time to time.
(iii) New Tourism Units at Eco-tourism Centres of Gujarat including Nalsarovar, Polo, Dangs, Jambughoda and such other places as may be notified by the State Government from time to time.
(iv) New Tourism Units owned and managed by women entrepreneurs (with minimum equity participation of 51% in the entity) and those belonging to SC/ST categories as also the differently-abled will be entitled to an additional 5% subsidy over and above the ‘Admissible Subsidy’.
(v) In all the above-mentioned cases, the total subsidy available will be subject to the ceiling prescribed under ‘Maximum Limit’.
(c) Eligible Capital Investment
The term Eligible Capital Investment shall include expenditure components as per the guidelines of MoT, GoI for the relevant Tourism Unit. However, the following heads of investments in respect of the unit shall not be eligible for incentives:
(i) Working Capital;
(ii) Pre-operative expenses and preliminary expenses;
(iii) Second-hand plant and machinery purchased or shifted from within or outside country;
(iv) Interest capitalized;
(v) Consumable stores, inventories for maintenance or repairs;
(vi) Investment on land required for setting up the Unit, inclusive of the cost of the land;
(vii) Vehicles, furniture and fixtures, cutlery, crockery and utensils; &
(viii) Any construction which is in the nature of real estate transactions, e.g., shops, flats, offices, etc. meant for sale /
lease / rent.
2. Interest Subsidy to the eligible tourism Units
3. Registration / Stamp Duty Concession
Eligible Tourism Units will qualify for 100% reimbursement of Stamp Duty and Registration Fee on sale/lease/transfer of land for the first transaction only during the operative period of this Policy. Reimbursement of Stamp Duty and Registration Fee would be made after the date of commencement of commercial operations.
4. Exemption from Luxury Tax
The exemption from Luxury Tax will be applicable to Eligible Tourism Units for a period of five years from the date of commencement of commercial operations or the date of completion of expansion. The unit availing the exemption benefit under this category shall have to pass on the same to the end user. The incentive will be reviewed when GST is introduced.
5. Exemption from Entertainment Tax
The exemption from Entertainment Tax will be applicable to Eligible Tourism Units for a period of five years from the date of commencement of commercial operations or the date of completion of expansion. The unit availing the exemption benefit under this category shall have to pass on the same to the end user. The incentive will be reviewed when GST is introduced.
6. Exemption from Electricity Duty
There will be complete exemption from paying Electricity Duty for a period of five years from the date of commencement of commercial operations for New Tourism Units only. For existing units, the Electricity Duty shall be charged as per Industry Rates and the same will be applicable with effect from the date of appropriate notification in this regard by the State Government.
7. Support for Sustainable Tourism
Assistance will be extended to eligible tourism units up to 75% of the cost of carrying out Energy Audit by a recognized institution/consultant, Water Harvesting / Conservation and Environment-friendly practices like Green
Buildings, Solar and other Renewable Energy measures, to a maximum token amount of Rs 50,000 per unit. It shall be disbursed once during the operative period of the Policy. Moreover such units will be accorded special recognition
by the State Government.
8. Special Package for Mega Tourism Units
The State Government shall duly promote and facilitate Mega Tourism Projects that have a large multiplier effect on the economy, leading to employment generation and inclusive growth in the State. Any type of Mega Tourism Units like Theme Parks, Amusement Parks, Water Parks, etc. meeting the qualifying criteria of Mega Tourism Units will be eligible. Following incentives would be offered to Eligible Mega Tourism Units:
(a) 100% reimbursement of Stamp Duty and Registration Fee on sale/lease/transfer of land for the first transaction only during the operative period of this Policy. Reimbursement of Stamp Duty and Registration Fee would be done after the commencement of commercial operations.
(b) Capital Subsidy of 15% of Eligible Capital Investment (excluding the cost of the land) subject to a ceiling of Rs.20 crores.
(c) Exemption from Luxury and Entertainment tax for a period of seven years from the date of commencement of commercial operations.
(d) Exemption in Electricity Duty would be for a period of five years from the date of commencement of commercial operations.
(e) It is, however, clarified that the Mega Tourism Units shall not be entitled to any interest subsidy.
Eligible Capital investment for Mega Tourism Units is defined as below:
(i) Building, that is, any built-up area used for the eligible unit including administrative building, staff residential quarters, and accommodation for such facilities as required for running the unit.
(ii) Plant and machinery, that is, tools and equipment and their installation charges including water sports equipment, tents, other equipment as are necessarily required and exclusively used for sustaining the working of the unit but will not include vehicles, furniture and fixtures, cutlery, crockery and utensils.
(iii) The cost of development of infrastructural facilities such as fencing, construction of roads, landscaping and other similar activities which the unit has to incur as a part of the project.
9. Incentive for Promotion of Innovation
The Policy proposes to give a fillip to innovation by providing an incentive on the commissioning of the project which should meet any one of the criteria as under:
a) Technologically introduced first time in the State; or
b) Significant leveraging of Information Technology; or
c) Having negligible carbon footprint.
The SLIC shall scrutinize the proposal to determine the eligibility.
Quantum of Assistance:
It will be a one-time incentive to be disbursed after the successful commissioning of the Project. Moreover, due recognition and publicity will be accorded by the State Government to innovative projects. Separate guidelines for the purpose shall be issued in due course.
10. Support for Marketing and Promotion
(a) All Tourism Service Providers operating in the State and registered with TCGL shall be eligible to be considered for this incentive. At the start of every financial year, the State Government will notify the names and number of such domestic and international tourism events for which this incentive shall be provided.
(b) The incentive for taking part in various national and international tourism exhibitions or fairs or marts shall be limited to 50% of the space rent actually paid subject to a maximum of Rs. 30,000 per national event or Rs. 75,000 per international event. The assistance will be extended not more than twice during the operative period of the Policy. The assistance would be provided by way of reimbursement. Tourism Service Providers shall apply along with rent receipts within six months from the date of participation to avail the assistance.
(c) In particular, the untapped / undertapped potential of tourism in the State will be unlocked by suitably incentivizing the organization of events which will give a boost to spiritual tourism, medical tourism, wellness tourism, adventure tourism, coastal tourism, heritage tourism, etc.
(d) In addition, FAM tours will be organized and sponsored by TCGL on a periodical basis to give exposure to national as well as international tour operators, travel media and others who in turn will be instrumental in promoting Gujarat. Moreover, the activities under MICE will be vigorously followed by the State Government, preferably on PPP mode.
(e) The State Government will organize Travel Marts periodically to boost the tourism and help promote investments in the Tourism Sector in the State.
11. Skill Development
(a) Leveraging the tremendous employment potential in the tourism sector, training and skill development courses for tourist service providers and the local populace with a special focus on the youth, the women, the differently-abled and SC/ST categories will be imparted through industry bodies / chambers of commerce / recognized tourism and hospitality institutions / ITIs in consultation with the Labour and Employment Department of the State Government as and where required.
(b) Engaging with reputed established Institutions to upgrade the IT skills required for the travel trade. Tour operators, agents, hoteliers, etc. operating in Gujarat would also be eligible for relevant training modules.
(c) Reimbursement of 100% of Course Fees, up to a maximum of Rs. 10,000 per person for course duration of a fortnight or more.
(d) Training to be imparted to Tourist Guides hailing from the local area with a monthly stipend of Rs. 5,000 to all the guides registered with CoT. Detailed implementation guidelines will be issued separately.
(e) Tourism courses would include courses for personnel working in hotels, resorts, restaurants, transportation booking, marketing, tourist guide, ticketing and any other related course as notified by the State Government from time to time.
(f) Third-party skill assessment of trainees after completion of course will be a condition precedent for the reimbursement of course fees.
12. Incentives for ICT Enablement
(a) The State Government will duly facilitate and support international and national-level conferences, exhibitions and other events in Gujarat for the promotion of usage of ICT in Tourism Sector. Financial assistance for conducting such conferences/events would be provided to the maximum limit of Rs.5.00 lacs per event, as may be approved by the State-Level Implementation Committee.
(b) TCGL would take pro-active measures for website upgradation, improvement in existing portal, usage of social media, online booking, mobile apps, etc.
(c) Provision of audio / video guides at selected heritage monuments/museums, etc. in the State under the jurisdiction of ASI / State Archaeology Department / Municipal Corporations.
(d) An effort would be made to provide the Audio/Video guides in Gujarati, Hindi, English and other languages as per the requirements in a phased manner. The Audio/Video guides to be used would necessarily be verified and certified by either the ASI or the State Archaeology Department.
(e) The Tourist Service Provider providing audio/video guide will be eligible for one-time assistance up to the extent of 25% of the cost of procuring the equipment / content creation or Rs. 25 lacs, whichever is less. Incentive can be availed only once by the operator during the operative period of the Policy. This incentive will be initially taken up for a few monuments only on a pilot basis.
(f) As and where required, the Department of S&T, Government of Gujarat will be consulted and the services of BISAG, ISR and GUJCOST will be suitably utilized towards the full-fledged ICT-enablement of the Tourism Sector.
13. Assistance for Research in the Tourism/Hospitality Industry
(a) Monthly tourist data are collected from key tourism destinations and then collated and analysed. Apart from basic tourist data, there is a need to methodically carry out regular market studies/research intensively to understand the emerging trends in tourism as also to appreciate the travel patterns of the tourists visiting Gujarat.
(b) Financial assistance up to the maximum limit of Rs.5.00 lacs will be provided to Recognized Tour/ Hotel Associations/ Chamber of Commerce to carry out market research studies on travel and tourism/hospitality sector in Gujarat. The subject matter would be finalized as per the relevance and requirements of the Industry. Not more than three such studies will be sanctioned each year.
Over and above the foregoing categorically-stated incentives and concessions, the CoT under the guidance of the State-Level Empowered Committee / Implementation Committee may take such other steps and initiatives as would help realize the Vision, Mission and Objectives of the Policy in the fullest possible measure.
Essential Conditions for Grant of Incentives
The Eligible Tourism Units and Mega Tourism Units availing incentives and concessions under the Policy shall also satisfy the following conditions:
(a) The unit seeking incentives under the Policy would be required to register as per the prescribed format (to be notified later) within six months of the first disbursement of the loan, which has to be within the operative period of the Policy and obtain the Eligibility Certificate from CoT.
(b) The unit will have to make a declaration regarding availing Capital/Interest Subsidy or any other financial assistance for the same project from Government of India or the Government of Gujarat under this Policy or any other Policy / Scheme. Non-declaration or false or misleading declaration would render the unit liable to disqualification leading to discontinuation of the Incentive, subsequent blacklisting and necessary legal action.
(c) The unit shall have the option for date of availment of interest subsidy either from the date of the first disbursement of the loan or from the date of commencement of commercial operation. This opted-for date will be final and period of 5 year will start from that date.
(d) The sum total of the Capital Subsidy, Interest Subsidy and Reimbursement of Stamp Duty & Registration Fee shall not exceed the eligible Project Cost.
(e) The unit shall remain in commercial operations continuously for at least five years after it is commissioned. However, in cases where the operation is discontinued due to reasons beyond the control of the unit, the State-Level Implementation Committee (SLIC) may examine the individual cases and condone the period of discontinuation based on the guidelines to be issued by the Government.
(f) The unit availing the incentives under the Policy shall install and effectively operate and maintain pollution control measures as per the standards prescribed by the competent authority in this regard.
(g) The unit shall furnish complete details regarding commercial operations, employment, annual return regarding Incentives availed or any other information which the State Government may require from time to time. The unit will have to follow guidelines of the employment policy of Government regarding the employment of local persons.
(h) All matters of interpretation, dispute or contention under the Policy will be referred to SLIC / Industries & Mines Department, Government of Gujarat whose decision will be final and binding on the applicant unit.
(i) The CoT will be responsible for administration and implementation of this Policy under the supervision and guidance of SLIC.
Definitions of Tourism Unit
Subsidy to Hotel
Hotel projects should have facilities expected of establishments in the one to five star categories as per the prevailing Guidelines of Hotels laid down by the Ministry of Tourism, Government of India. Such hotels should also obtain necessary category certification from the competent authority.
Subsidy to Heritage Hotel
‘Heritage Hotel’ means a hotel run in a fort, fortress, palace, haveli, castle, hunting lodge or residence with heritage features, built prior to January 1950 and approved by the Ministry of Tourism, Government of India. Such Heritage
Hotels should also obtain necessary category certification from the competent authority.
Subsidy to Apartment Hotel
Apartment Hotel projects should have facilities as per the prevailing Guidelines for Apartment Hotels laid down by the Ministry of Tourism, Government of India. Such Apartment Hotels should also obtain necessary category certification from the competent authority.
Subsidy to Motel
Motel projects should have facilities conforming to the prevailing Guidelines for Motels laid down by the Ministry of Tourism, Government of India. Such Motels should also obtain necessary category certification from the competent
Subsidy to Convention Centre
Convention Centre should have facilities as per the prevailing Guidelines for Convention Centre as laid down by the Ministry of Tourism, Government of India. Such Convention Centre should also obtain necessary category certification from the competent authority.
Subsidy to Resort
Resort projects should be of three-star category or above having facilities as per the prevailing Guidelines of Ministry of Tourism, Government of India. Such Resorts should also obtain necessary category certification from the competent authority.
Subsidy to Tented Accommodation
Tented Accommodation projects should have facilities as per the prevailing Guidelines for Tented Accommodation as laid down by the Ministry of Tourism, Government of India. Such Tented Accommodation should also obtain necessary category certification from the competent authority.
Subsidy to Tourism & Hospitality Training Institute
The Institute must be offering tourism/hospitality courses that are recognized/certified by regulatory authorities.
Subsidy to Mega Tourism Unit
Projects capable of creating new employment of more than 150 persons with new investment of Rs. 75 crores and above (excluding the cost of land) will be construed as Mega Tourism Units. Units which are set up and which commence commercial operations during the operative period of this Policy will only be eligible under this category. The proposals of Mega Tourism Units would require due approval of the State-Level Empowered Committee (SLEC). Hotels and Resorts, Multiplexes and Malls shall be excluded from the definition of Mega Tourism Unit.
Subsidy to Amusement Park
Amusement Park should have entertainment facilities such as rides, games, etc built over a minimum plot area of 40,000 sq.m.(about 10 acres). Stand alone commercial multiplexes shall not be treated as Amusement Parks.
Subsidy to Water Park
Water Park should have a minimum of three water slides with a plot area of at least 20,000 sq.m. (about 5 acres) and a capacity to handle at least 100 sliders simultaneously.
Subsidy to Theme Park
Theme Park should be based on a single or series of themes having a plot measuring at least 10,000 sq.m. (about 2.5 acres). It may have amusement rides, water slides, accommodation (at least ten lettable rooms), restaurant, theatre, shopping area, activity area and theme areas. It is, however, not mandatory to have all these features.
Subsidy to Adventure Sports
Adventure Sports should have the requisite infrastructure, equipment and trained staff, along with appropriate safety-and-rescue set-up, that will provide tourists with an opportunity to undertake permissible adventure and suchother activities like mountaineering, river rafting, etc. All requisite permissions from various Competent Authorities as also a comprehensive insurance cover will have to be obtained beforehand.
Subsidy to Wayside Amenities
Wayside amenities would be a complex comprising resting areas, toilets, cafeteria, shops, first-aid facility, parking, souvenir booths, etc located on National/State Highways and Other District Roads. It is, however, not mandatory to have all these features. Detailed guidelines in this regard will be issued hereafter.
Procedure to get Subsidies
Step No. 01 (Registration)
Register your unit as tourism unit with Gujarat Tourism. Application for Registration is to be submitted to the Commissionerate of Tourism.
- Proof of Identity (i.e.PAN Card) and Address of the Company (electricity bill).
- Certificate of Incorporation issued by ROC, MCA (If Applicable)
- Full Address of Company – on letter head of Company along with telephone number / fax number and name of authorized person duly signed by MD of the company.
- Certified copy of MOA and AOA or Partnership agreement (as applicable)
- Turnover details for last 3 years – Balance Sheet, profit & Loss account for Last 3 years, duly certified by CA (in case of expansion project)
Step No. 02 (Form A)
After registering your unit with Tourism department Application for Incentive (Form A – General Details) is to be submitted to the Commissionerate of Tourism.
- Copy of Electricity bill (as address proof in case of any change of address as provided fro registration)
Step No. 03 (Form B)
After submitting form A with Tourism department Application for Incentive (Form B – Capital Subsidy Form) is to be submitted to the Commissionerate of Tourism.
- Detailed Project Report
- Copy of First Commercial Sale Bill
- CA Certificate for Expenditure Details Furnished
- CA Certificate for Additional Capacity created (in case of Expansion)
- CA Certificate for Capital Investment heads and means of Finance
- Balance Sheet of the Last Financial Year Ending
Step No. 04 (Form C)
After submitting form A with Tourism department Application for Incentive (Form C – Interest Subsidy Form) is to be submitted to the Commissionerate of Tourism.
- Detailed Project Report
- Copy of First Commercial Sale Bill
- Copy of Loan Sanction Letter provided by the Bank / Financial Institution
- itemized statement and the related confirmation records/ certificate from the Bank/ Financial Institution for the investment done after the announcement of policy and till the date of application.
- Details of loan approved by the Bank/ Financial Institution viz, interest rate, interest amount payable and paid by the Company / Unit including confirmation / certificate from the Bank / Financial Institution for the same.
Step No. 05 (Form D)
After submitting form A with Tourism department Application for Incentive (Form D – Registration / Stamp Duty Concession Form) is to be submitted to the Commissionerate of Tourism.
- Detailed Project Report
- Copy of First Commercial Sale Bill
- Schedule of the Land
- Sketch Map of the Land / Building Purchased
- Document showing payment of stamp duty and registration fee
- Copy of 7 / 12 extract / 8A Property Card of Land
- Non – Agriculture Land (NA) Permission
- Land & Building – Purchase Deed / gift Deed / lease deed (as applicable)
After Scrutiny of application submitted in prescribed format and documents submitted as per checklist, the official or team visits the tourism unit to ascertain the unit has complied with all the provision of scheme or not. On the basis of recommendation of visiting officials and all the forms and documents CoT sanction and disburse the subsidies.
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