“Fiscal incentives under Andhra Pradesh Tourism Policy 2015-20”

GOVERNMENT OF ANDHRA PRADESH

ABSTRACT

“Fiscal incentives under Andhra Pradesh Tourism Policy 2015-20” – Guidelines- Issued.

--------------------------------------------------------------------------------------------------------------------------

YOUTH ADVANCEMENT TOURISM & CULTURE (T)DEPARTMENT

G.O.MS.No. 10 Dated: 15-09-2015

Read:-

G.O.Ms.No.9, Youth Advancement, Tourism and Culture(T) Department. Dt: 12.06.2015.

>><<

O R D E R:

In the G.O.read above, Government, with a view to make the State more conducive

and attractive for potential investors and provide an impetus to the tourism sector, have issued

orders approving the “Andhra Pradesh Tourism Policy 2015-20”. The Policy shall remain in

force up to 31-03-2020. The policy envisages granting various incentives for the New Tourism

units. It was also mentioned in the G.O. that the incentives provisioned in the Policy will be

implemented as per orders and guidelines to be issued separately.

2. Accordingly Government after careful examination hereby issue orders for

implementation of incentives to promote Tourism in the state of Andhra Pradesh under the

“Andhra Pradesh Tourism Policy 2015 -20”. The Incentives mentioned in the Policy will be

extended to New Tourism units. The General definitions are appended at Annexure I .

3. Under the new “Andhra Pradesh Tourism Policy 2015-20”, the Government has

approved incentives to the following categories of “New Tourism Unit”.

a) Tourism Infrastructure Projects

b) Tourism Services

4. The incentives for the above categories are as follows:

4.1.1 Tourism Infrastructure Projects

a) Following categories of projects qualify as Tourism Infrastructure projects as per

Andhra Pradesh Tourism Policy 2015-20:

i. Hotels (Three-Star or above category hotels as per guidelines of Ministry of

Tourism, Government of India)

ii. Resorts, including beach resorts, jungle resorts, hill resorts etc. (Three-Star

or above category hotels as per guidelines of Ministry of Tourism,

Government of India)

iii. Heritage Hotels (Heritage Basic, Heritage Classic, Heritage Grand as per

guidelines of Ministry of Tourism, Government of India)

iv. Amusement Parks

v. MICE Centers

vi. Golf Courses

vii. Botanical gardens

viii. Urban/Rural Haats

ix. Tourism & Hospitality Training Institutes

x. Wayside amenities

xi. Spiritual/Wellness Centers

b) To be eligible for incentives, the project needs to be a new Tourism Infrastructure

Project and compliant with the definitions and minimum requirements as prescribed

in Annexure 2.

4.2 Fiscal Incentives for Eligible Tourism Infrastructure projects

a) Private Sector Investments

i. Following incentives are applicable for private sector Tourism Infrastructure

projects:

b) PPP Investments
i. Following incentives are applicable for PPP investments in eligible Tourism

Infrastructure projects:

ii. GoAP may also opt for models like Joint Venture, Special Purpose Vehicle,
Equity, Annuity etc. for select Mega Tourism Infrastructure Projects.
iii. In cases where a private sector investor submits an unsolicited or suo-motu
proposal; not initiated by the Government, the “Swiss Challenge Approach” shall
be followed, as enunciated in GoAP “Guidelines for Public Private Partnerships”
and as per provisions of APIDE Act.
c) Government Projects
i. In cases where select Tourism Infrastructure projects are undertaken by
Government, through a designated government agency, incentives and support
to be provided would be based on internal government decisions on a case-tocase
basis.
d) Mega Tourism Infrastructure Projects
i. Mega Tourism Infrastructure Projects are projects with investment above Rs. 200
crores, irrespective of location in the State.
ii. For Mega Tourism Infrastructure Projects, additional incentives and concessions
on a case-to-case basis may be granted with approval of the STPB/STPC or the
SEDB as the case may be.
e) Additional incentives for Tourism Infrastructure projects:
i. Performance based incentives: Government will institutionalize Tourism
awards for rewarding best performing Tourism Infrastructure Projects in the State
based on various parameters. Guidelines for the same will be published
separately.
ii. Marketing incentives: Government will facilitate a central booking engine
through the Andhra Pradesh tourism website. Support will be provided by the
Government for leading tourism units under Tourism Infrastructure Projects to
participate in Tourism events in India and abroad. Guidelines for the same will
be published separately. Government will advertise Tourism Infrastructure
Projects in brochures and other print material of Andhra Pradesh Tourism.
f) Special conditions for Eligible Tourism Infrastructure projects:
i. Incentives provisioned in this Policy shall not be applicable for any existing
Tourism Infrastructure project that is being expanded, modified or upgraded.
ii. For incentives proposed in this policy to be applicable for a new Tourism
Infrastructure project, commercial operations must start before March 31, 2020.
iii. While extending incentives, subsidies and concessions, it shall be a general
condition that the total financial commitment from Government, including
incentives mentioned in Complementary/Linkage Infrastructure Development
Assistance, Land Conversion Charges and Registration and Stamp duty sections
of private sector investments and Land Conversion Charges, Registration and
Stamp duty and Complementary/Linkage Infrastructure Development Assistance
sections of PPP projects, shall not exceed 20% of the Total Project Cost of the
Tourism Infrastructure Project, excluding the cost of land. This condition will also
be applicable for Mega Tourism Infrastructure Projects.
4.3 Tourism Services
a) Following categories of projects qualify as Tourism Services as per the “Andhra

Pradesh Tourism Policy 2015-20”:

b) To be eligible for incentives, Tourism Services need to be compliant with the
definitions and minimum requirements as prescribed in Annexure 3 appended to
this order.
c) Following incentives will be applicable for eligible Tourism Services:

i. Investment Subsidy for eligible Tourism Services will be applicable as follows:

ii. GoAP will support building of Complementary/Linkage Infrastructure
(example – jetties, helipads etc.) which becomes essential for the provision of
the Tourism service. Support will be up to 20% of the cost of building of
Complementary/Linkage infrastructure or Rs 25 lakhs, whichever is less
iii. GoAP may provide any other support on case-by-case basis after due
examination for investments greater than Rs 20 crores in tourism services.
iv.
d) Special conditions for eligible Tourism Services:
i. Incentives provisioned in this Policy shall not be applicable for any existing
Tourism Service that is being expanded, modified or upgraded.
ii. For incentives proposed in this policy to be applicable for a new Tourism
Service, commercial operations must start before March 31, 2020.
iii. While extending incentives, subsidies and concessions, it shall be a general
condition that the total financial commitment from Government, including
incentives towards Investment Subsidy and Complementary/Linkage
infrastructure, shall not exceed 20% of the total project cost of the Tourism
Service, excluding the cost of land, if any.
5. The concerned Departments of Secretariat/ HoDs shall take appropriate action to
implement the orders by amending the Rules and executive instructions, if necessary.
6. In respect of incentives where other Departments have to issue orders separately the
said incentives will come into force from the date of issue of such orders subject to fulfillment of
other eligibility conditions as applicable. The details of New Tourism Policy 2015 are made
available on the website www.aptourism.gov. in.
7. This order issued with the concurrence of Finance Dept. vide their
U.O.No.9724/274/A2/EBS.I/15, Dt:30.07.2015.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)
NEERABH KUMAR PRASAD
PRINCIPAL SECRETARY TO GOVERNMENT

Annexure 1: Definitions
1. TOURISM UNDERTAKING
Tourism Undertaking' means a legal entity under relevant law engaged or to be engaged in
one or more tourism projects.
2. NEW TOURISM UNIT
A 'New Tourism Unit' means a new Tourism Infrastructure Project or Tourism Service set up
for the first time by a Tourism Undertaking which satisfies the conditions indicated, and have
commenced their commercial operations within the Policy Period; i.e, date of commercial
operations falls between date of notification of this Policy and March 31, 2020.
3. TOTAL PROJECT COST
The term ‘Total Project Cost’ for Tourism Infrastructure Projects, which meet the criteria in
Annexure 2 below shall include:
i. Land/area in effective possession and as required for the project
ii. Building i.e. any built-up area' used for the eligible unit including administrative
buildings, residential quarters and accommodation for all such facilities, as required
for the running of the unit
iii. Plant and machinery i.e. tools and equipment including water sports equipment,
tents, other equipment as are necessarily required and exclusively used for
sustaining the working of the eligible unit but will not include vehicles, furniture and
fixtures, cutlery, crockery and utensils
iv. Cost of development of fencing, construction of roads, landscaping and other
infrastructure facilities etc. which the eligible unit has to incur under the project
v. Vehicles used for specific tourist activities
vi. Installation charges
vii. Technical know-how including cost of drawing and know-how fees
The term ‘Total Project Costs’ for Tourism Services, which meet the criteria in Annexure 3
below, shall include:
i. Land/area in effective possession and as required for the project
ii. Plant, machinery and movable / immovable equipment, i.e. tools and equipment
including water sports equipment, tents, other equipment as are necessarily required
and exclusively used for sustaining the working of the Tourism Service
iii. Cost of development of fencing, landscaping, infrastructure facilities (example,
jetties, helipads etc.) which the eligible unit has to incur under the project
iv. Movable and immovable equipment, including transport vehicles specifically required
for offering the Tourism Service
4. INELIGIBLE INVESTMENT
The following investment shall not be covered under Total Project Costs and will be
ineligible for incentives viz.
i. Working Capital
ii. Goodwill
iii. Second-hand plant and machinery purchased or shifted
iv. Interest capitalized
v. Consumables stores, inventories for maintenance or repairs
vi. Any investments in any asset which has a life span of less than five years
vii. Know-how fees or cost of drawing payable to a sister concern of eligible unit
5. DATE OF COMMERICAL OPERATIONS
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

Annexure 2: Minimum Eligibility Criteria for Tourism Infrastructure projects