Draft Tourism Trade Rules face criticism from stakeholders

Srinagar, Aug 7: The tourism industry in Kashmir is up in arms following the administration's notification of draft Tourism Trade Rules.

The proposed regulations, which detail new registration and renewal fees for a wide range of tourism-related businesses, have sparked intense criticism from industry stakeholders.

At the heart of the controversy are two key issues - a substantial hike in fees across various categories of establishments and the continuation of a two-year renewal policy, despite longstanding demands for a one-time registration system.

The draft rules detail a tiered fee structure for different categories of tourism establishments.

For a hotel or resort of A category five-star deluxe, the owner is subjected to pay a sum of Rs 2 lakh for two years to the government for the renewal of registration of the property.

Similarly, for A category five star, A category four-star, A category three-star, A category two-star, and A category one-star, the owner has to pay Rs 1,50,000, Rs 1,30,000, Rs 100000, Rs 50,000, and Rs 30,000 for two years.

The owner of the guest house, camp hotel, restaurant, Dhaba, and tea stall will have to pay Rs 20,000, Rs 20,000, Rs 10,000, Rs 5000, and Rs 2000 registration fee.

The rates for registration and renewal of registration for houseboats falling in the deluxe category have been decided at Rs 50,000.

The owner of houseboats falling in categories A, B, C, and D will have to pay Rs 40,000, Rs 30,000, Rs 20,000, and Rs 10,000.

The renewal of the registration fee for Golden Category homestay and Silver Category homestay has been suggested as Rs 4000 and Rs 2000.

For travel and excursion agents and adventure tour operators, the fee is Rs 30,000, while for guides, bathing boat owners, motor boat owners, photographers, and taxi boats, it is Rs 10,000 each, except for taxi boats which is Rs 5000.

Camping agents, camping equipment vendors, ponny wallas, and sledge wallas face fees of Rs 5000, Rs 5000, Rs 1000, and Rs 1000.

Houseboat Owners Association President, Manzoor Pakhtoon expressed his dismay at the new rates: "It is an injustice for houseboat owners, who are already drastically reduced in number due to government policies. While a registration fee hike of 10 to 15 percent might be justified, we used to pay just a few thousand rupees. Now, for a Deluxe houseboat, this registration fee has been hiked to Rs 50,000. Moreover, there are various conditions in the draft rules which are simply not possible for us to adhere to. We have consulted a lawyer to formulate our response and objections to these rules.”

Sajid Ahmad, a hotelier, highlighted the discrepancy between tourism registration policies and other business registrations, saying, “When business establishments apply for GST registration, income tax registration, or registration under the Companies Act, they receive lifetime registration. This approach provides stability and ease of doing business, as the government retains the authority to cancel any registration if necessary. In contrast, the Deputy Director of Registration currently grants licenses for only one year in the tourism sector.”

Sajid emphasised the financial burden these new fees would impose saying, “The registration charges proposed in the new draft policy are extremely high. After paying substantial amounts for GST and income tax, it is burdensome for businesses to bear additional high fees for registration and running their establishments. Adopting a lifetime registration policy for tourism infrastructure would be a significant step towards enhancing the ease of doing business.”

Adil Ahmad, President of JKHARA (Jammu and Kashmir Hoteliers and Restaurants Association), criticised the government's approach to formulating these rules saying, “The government has formulated rules and astronomical registration fees without consulting stakeholders. It is not feasible for us, and the registration fee is categorized in such a way that it will be a burden for hoteliers.”

These draft rules come at a crucial time for Jammu and Kashmir's tourism industry, which has been working to recover from recent economic challenges.

Some concerns that increased operational costs could lead to higher prices for tourists, potentially affecting the region's competitiveness as a tourist destination.

As these are draft rules, the administration has given time to stakeholders to submit comments and feedback.

Industry associations are expected to submit their formal objections and suggestions to the administration.

The final shape of the rules will depend on how the administration responds to this feedback, officials said.