Rajasthan Tourism Unit Policy, 2015

What is the Rajasthan Tourism Unit Policy, 2015?

Rajasthan Tourism Unit Policy, 2015 is the Department of Tourism's framework for getting tourism projects built in the state. It replaced the Rajasthan Tourism Unit Policy, 2007, and the department's stated reason for replacing it was to extend more support and incentives for establishing tourism units.

The policy is not a subsidy scheme in the ordinary sense. Read it as a clearances and concessions policy. What it primarily does is remove the frictions that stop a hotel or a resort from being built. It fixes time limits on land conversion and building plan approval, grants deemed conversion if those limits are missed, waives conversion charges and stamp duty, doubles the permissible Floor Area Ratio, gives heritage properties a route to a patta, and then channels the actual money benefits through the Rajasthan Investment Promotion Scheme (RIPS).

The policy addresses, in the department's own listing, time-bound conversion of land for tourism units including new hotels and heritage hotels, time-bound approval of building plans, grant of patta to heritage hotels, allotment of land for tourism units at DLC rates, applicability of RIPS to tourism units, and coordinated implementation across the Revenue, Urban Development and Housing, Local Self Government and Panchayati Raj departments.

The Department of Tourism is the nodal department for infrastructure development of tourism units, and the Commissioner or Director, Department of Tourism, Jaipur is the competent authority to approve tourism unit projects.

Which units are eligible, and who is not eligible?

A tourism unit means a tourism project approved by the Department of Tourism, Government of Rajasthan or by the Ministry of Tourism, Government of India. The policy lists these categories:

1. Hotel including motel, minimum 20 lettable rooms and minimum investment of Rs 2 crore.
2. Heritage hotel. A hotel run in a fort, fortress, palace, haveli, castle, hunting lodge or residence with heritage features built prior to 1.1.1950, and approved by the Ministry of Tourism or the Government of Rajasthan.
3. Budget hotel; minimum 20 lettable rooms and Rs 2 crore investment, basic amenities at affordable rates, outside the ambit of luxury tax.
4. Restaurant or cafeteria, investment of at least Rs 1 crore excluding land cost, seating for a minimum of 40 persons, a hygienically maintained kitchen with modern equipment, and separate toilets for ladies and gents.
5. Resort; sports or recreational facilities, riding, swimming or social amenities with boarding and lodging in cottages or rooms.
6. Sports resort, golf course, golf academy or adventure sports, provided that for a golf course the water source is substantially recycled water.
7. Health resort spa, short-term residential facility for massage, yoga, meditation and related treatments.
8. Camping site, furnished tents, at least 10 tents, with dining and bathroom facilities.
9. Amusement park.
10. Animal safari park: developed with the permission of the Forest Department.
11. MICE or convention centre — covered, pillar-less, air-conditioned hall of minimum 5,000 sq ft carpet area, accommodating at least 500 persons.
12. Museum, open to the general public, with or without a ticket.
13. Ropeway, established under the prevailing Act and Rules.
14. Tourist luxury coach, air-conditioned, push-back seats, minimum 13 seats, operated by a valid All India Permit holder recognised by IATO and RATO and registered in Rajasthan.
15. Caravan; registered with a State Transport Department, at least 4 beds.
16. Cruise tourism; any boat or yacht with seating for at least 4 persons, licensed by the Transport Department, Rajasthan. Boats used by hotels only to transport or entertain their own guests or goods are excluded.
17. Units classified by the Ministry of Tourism, Government of India, which are eligible irrespective of the number of rooms.

Who cannot apply or claim under this policy:

• Individuals seeking a personal benefit. This is an industrial and infrastructure policy for tourism enterprises. There is no citizen application and no personal grant.
• Units below the stated thresholds, a 12-room guest house, a restaurant under Rs 1 crore of investment, a camping site with 6 tents.
• Hotel-owned boats used only for the hotel's own guests or goods, which are expressly excluded from the cruise tourism definition.
• Projects that miss their completion deadlines, whose concessions stand withdrawn and lapsed.
• Anyone seeking to use policy-allotted land for another purpose. Land made available under the policy cannot be used for any other purpose for at least 30 years.

What does an approved tourism unit actually get?

Land and building concessions

• No conversion charges payable for land held by a tenant for establishing a tourism unit, in urban as well as rural areas.
• No development charges payable by tourism units.
• No fee for change of land use when converting residential land or heritage properties into hotels or other tourism units.
• Double FAR of 4.50, of which 2.25 is without betterment levy, against the standard 1.33 without levy and 2.25 with levy.
• Deemed conversion if the competent authority does not issue conversion orders within the prescribed time.
• Government land at DLC rates: rural land at the prevailing DLC rate for agriculture and urban land at the DLC rate for residential purpose, allotted by competitive bidding where there is more than one applicant, and to the single bidder at DLC rate where there is not.
• Licence duration extended to ten years in the first instance for annual licences required to operate tourism units.

Land area reserved for allotment

Fiscal benefits, delivered through RIPS

The policy states that all fiscal benefits provided in the Rajasthan Investment Promotion Scheme for tourism sector enterprises are available to eligible tourism units, and that projects approved by the Ministry of Tourism may also avail RIPS benefits if otherwise eligible. Under RIPS 2019, tourism is treated as a thrust sector, and the department's own FAQ records:

• Investment subsidy of 75 percent of State tax due and deposited, for seven years.
• Employment generation subsidy reimbursing 50 percent of the employer's contribution towards employees' EPF and ESI for seven years, with 75 percent reimbursement granted in the stated case.
• For enterprises investing Rs 5 crore or more in the tourism sector, either a capital subsidy of 20 percent of investment in plant, machinery and equipment, subject to a maximum of Rs 25 lakh, or a 5 percent interest subsidy on a term loan from a recognised financial institution for five years, subject to a maximum of Rs 25 lakh per year.
• 100 percent exemption from electricity duty for seven years.
• 100 percent exemption from land tax for seven years.
• 100 percent exemption from conversion charges and 100 percent from stamp duty.

Heritage hotels get an additional set: no minimum investment requirement, conversion of existing and operating heritage hotels by the local authority, UD Tax charged at residential rates on built-up area with no UD Tax on open area, BSUP charges only on covered area, permission to operate on narrow urban roads where dedicated alternative parking on a 40 or 60 feet road with a park-and-ride arrangement is provided, and lease or freehold rights from the municipality where no patta exists. Heritage hotels may commercially convert a maximum of 1,000 sq metres or 10 percent of the plinth area of the existing heritage building, whichever is less.

How to apply for tourism unit approval and benefits

1. Purchase the land if not already owned. A 50 percent exemption in stamp duty can be availed at the time of purchase.
2. Submit the project application for approval to the Single Window System at swcs.rajasthan.gov.in, for approval by the Department of Tourism. This is to be disposed within 45 days.
3. Obtain free-of-cost conversion of land from the concerned authority, 45 days in rural areas, 60 days in urban areas. If no order issues in that time, the land is deemed converted.
4. Get the building plan approved. The competent authority in an urban area must dispose of the application within 60 days of a complete application.
5. Construct and commence operation; within 3 years for a unit of less than 200 rooms and 4 years for more than 200 rooms, counted from land conversion or from building plan approval where that approval is required. One further year may be granted on merit.
6. Acquire the required licences and commence operation of the tourism unit.
7. Apply to the DIC or the Commissioner, Industries for full RIPS benefits within 90 days of starting operation. Missing this window is the most avoidable way to lose the fiscal package.

Time limits worth marking on a project plan

What happens if a project is delayed?

The penalty provision is explicit. If a tourism project is not commissioned within the prescribed time, all concessions and benefits availed by the applicant, such as rebate in stamp duty and conversion charges, stand withdrawn, and government land allotted stands cancelled. In a rural case the applicant has to register again. There is also a general recovery provision under RIPS: where an enterprise has wrongly or excessively availed benefits, the benefits are not allowed to the enterprise or any other unit or branch of it unless the wrongly availed amount is deposited with interest at 18 percent per annum.

Skill development and training

All tourism units registered with the Department of Tourism are directly eligible to become training partners under the Employment Linked Skill Training Program (ELSTP) of the Rajasthan Skill and Livelihoods Development Corporation (RSLDC), subject to having the required infrastructure. A hotel enrolling as a training partner must set up a training centre in its premises for courses from the approved RSLDC list, mobilise youth, run training to the syllabus, participate in third-party assessment and certification, and ensure at least 50 percent of trained youth are linked to employment.

What has changed since 2015

Two developments matter to anyone reading the policy today.

First, the policy itself states it will remain in force for five years from the date of issue, with the qualification that projects already approved under the 2007 policy but pending land conversion, building plan approval or regularisation do not need to apply afresh and receive all incentives under the 2015 policy and RIPS.

Second, the state has since given the tourism and hospitality sector full industry status, notified under budget announcement number 166 for 2022-23, so that government tariffs and levies apply to the sector on industrial norms. Since an office order dated 18 May 2022, the Department of Tourism issues an entitlement certificate to tourism units for these benefits, applied for online through the Tourism Dept. Services app on the state SSO portal, sso.rajasthan.gov.in, and disposed by the local Tourist Reception Centres within a maximum of 30 working days. Units defined in the Rajasthan Tourism Unit Policy 2015 are the first category eligible for that certificate.

Help and contact

• Approving authority: Commissioner or Director, Department of Tourism, Government of Rajasthan, Jaipur
• Project applications: swcs.rajasthan.gov.in (Single Window Clearance System)
• Entitlement certificate: sso.rajasthan.gov.in, Tourism Dept. Services app
• Local office: the Tourist Reception Centre of the district
• RIPS procedure and updates: industries.rajasthan.gov.in
• Policy documents: tourism.rajasthan.gov.in, under acts and policies

A Tourism Advisory Committee, including representatives of the tourism and travel trade, is constituted to advise on measures for the growth of tourism in the state.