The hotel industry is entitled to various benefits including among other things, income tax concessions under the Income Tax Act and priority consideration of its various requirements like telephone, telex, L.P.G. etc. by the government authorities at Municipal, State & Union levels or a semi or quasi – Government body. To be eligible for these benefits, a hotel has to be approved by the Department of Tourism. Such approval is granted, from the point of view of the suitability of a hotel for foreign tourists and approved hotels are required to maintain certain minimum level of standard of service and amenities. There are six categories of approved hotels ranging from 1 star to 5 star deluxe.

The approval can be applied for at the project/ planning stage. A hotel approved at the project stage is eligible for allocation of foreign exchange for its essential import of equipment and provision. On completion and becoming functional, like other functioning hotels, it also gets worldwide publicity through tourist literature published by the Department of Tourism and overseas agencies. Approved hotel projects are also eligible for the grant of loan from the Industrial Financial Corporation of India and the respective State Finance Corporation or tourism Finance Corporation of India.This financial corporation in the context of detailed feasibility studies etc. considers the application of loan, and the project approval by the Department of Tourism should not in any way be construed as an assurance for the grant of any loan thereto.

The application for approval of a hotel at the project/ planning stage should be submitted, in the prescribed form, complete in all respects, to The Director General, Ministry of Tourism, Government of India, Transport Bhavan, I, Parliament Street, New Delhi – 110 001.In the case of hotel projects planned for the four and five star categories and to the Regional Director of the concerned Govt. of India Tourist office at Delhi / Bombay / Calcutta / Madras in the case of 1, 2, and 3 star categories. A copy of the application should be endorsed to the Director/ Manager of the nearest Government of India Tourist Office and to the Director (Tourism) of concerned State Governments.

Various documents and information to be furnished about hotel projects when applying for project approval are given in detail in the application 1 form. However, the basic requirements are given below and these should be sent along with the application form.

A project report establishing the feasibility of the proposed hotel, describing the amenities to be provided at the hotel, particularly mentioning any special or distinctive features and indicating the star category which the establishment is being planned for. The criteria applied in determining the star category of a hotel on classification by the Hotel & Restaurant Approval & Classification Committee as a functioning unit, are briefly described later in these guide lines.

The site selected should be suitable for the construction of a hotel intended for use by foreign tourists. While selecting the site, aspects such as its accessibility from the airport/railway station/shopping areas, etc. making it a convenient location, may be kept in mind as also that its environs are not crowded, noisy, unhygienic etc.

A land-use certificate from the concerned State/ local authority certifying that it is permissible to construct a hotel on the site selected. Blue prints of the sketch plans of the project (including front and side elevation) indicating the areas, with dimensions of the rooms, bathrooms/public rooms etc., duly signed by the architect and the promoter. The Department has prescribed certain minimum area standards for guest rooms and attached bathrooms and it should be ensured that none of the guest rooms/ attached bathrooms fall short of the prescribed minimum carpet area limits which are given below:

		Ownership Deed of the land
		Urban Land Celling Certificate, if applicable
		Approval of International Airports Authority of India/Director General of Civil Aviation if hotel project is nears an airport
		Name and business antecedents of the promoters
		Proposed ownership structure, giving full details as to whether the new undertaking will be owned by individuals or a firm or a company.
		Estimated cost of the project and the manner in which it is proposed t raise the funds to meet the cost.
		The Department has prescribed regulatory conditions to be adhering to by promoters of approved hotel projects. The promoters should furnish the acceptance of these regulatory conditions in the prescribed form. The regulatory conditions and the form of their acceptance appear later in these guidelines.

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