In a bid to promote employment opportunities in the tourism sector, the government has extended the benefit of Section 10 (23G) to financial institutions to advance long-term capital to hotels in three star and above categories.

This was announced by Finance Minister Jaswant Singh while presenting the Union Budget 2003-04.

The expenditure tax has been withdrawn, he said, adding that the hotel industry shall continue to enjoy exemption from levy of service tax.

The benefit of set-off of unabsorbed loss and depreciation on amalgamation would henceforth be available to hotels under Section 72A of the Income Tax Act.

Another key feature of the provisions relate to reduction of basic customs duty on imported equipment for rope-way projects to five per cent without payment of CVD and SAD.

PTI