Tourism Breaking News
Dr. Subhash Goyal, Chairman Aviation & Tourism Committee of Indian Chamber of Commerce (ICC) is also a veteran in the tourism industry thanked the Hon’ble Finance Minister for acknowledging the tourism sector’s significant contribution to the nation’s economic growth and job creation.
He also thanked the Minister for the initiative to develop 50 tourist destinations in collaboration with state governments, with the focus on enhancing India’s global image as a premier travel destination.
The effort will be on improving the infrastructure development and accessibility to the monuments and sites to attract more tourist visitors.
At the same time, Dr. Goyal also expressed his disappointment on the Budget passed by the Hon’ble Finance Minister as the allocation of only Rs. 3 crores given to the Ministry of Tourism is shocking. Earlier the allocation was Rs.400 Crore when we had a very successful Incredible India campaign, which was drastically reduced to Rs.33 crores and now to Rs.3 crore is absolutely meaningless.
By this publicity to the global consumer for tourism has come to an end and the little efforts will be made on a B2B level through trade fairs will also be further curtailed apart from the fact that the consumer’s demand for India has gone down.
The image of India will take a hit when we will not be able to participate in any international trade fairs; and small countries like Srilanka, Maldives, Malaysia, Thailand and Vietnam will have huge pavilions to attract international tourists.
Dr. Goyal said, the greatest need of this country is employment generation and poverty eradication. With the coming of AI (Artificial Intelligence) lot of jobs will be drastically cut and reduced, not only in the manufacturing sector but also in the services sector. He further added that the only solution is to promote Tourism which is a labour intensive industry and one of the largest employment generators in the world.
Tourism can earn billions of dollars of foreign exchange. In 2019 the industry earned 2.16 crores in foreign exchange and if we promote tourism properly, our entire deficit of foreign exchange can be covered and it will also create millions and millions of jobs in the remotest areas amongst poorest of the poor.
Dr. Goyal adds, the industry needs the following:
1. Marketing Development Assistance (MDA) scheme to be reinstated to help the small and medium operators to attend the international trade fairs & exhibitions.
2. Foreign Exchange earnings by Tour Operators and tourism industry to be treated as export earnings and be given all the benefits as are being given to the export industry.
3. It is estimated that 30-40 billion dollars per month can be achieved from tourism, thus nullifying the present deficit.
4. Instead of SEIS productivity linked incentive as is being given to manufacturing sector must be given to tourism
services exported earning foreign exchange for the country. Further as manufacturing sector gets benefit of RoDTEP on their foreign change earnings, a similar benefit should be extended to Tourism export also.
5. It is also requested that financial assistance to tour operators based on their foreign exchange earnings needs to
be re-instated which they could use for giving by passing the incentives to foreign tour operators to compete with our
neighbouring countries.
6. Tour operator services are taxed under 5% tax slab with denial of Input Tax Credit (ITC) under SAC Code 9985. 5% tax on entire package value results in taxing all the input services procured by the tour operator once again.
7. We suggest that as in the case of Air Travel agents, GST may be levied @ 18% on the 10% mark-up (deemed value)
so that effective rate of tax on package cost works out to 1.8% ( say 2%) of gross billing with no ITC. It is submitted
that the present rate of 5% GST on the gross billing (without ITC) is high and in any case, it does not represent tax on value addition which is the backbone of GST system.
8. The services of renting of motor vehicle or other transport vehicle are similar to the services of another tour operator. Since a tour operator is allowed the facility to avail ITC of GST charged by another tour operator, it is logical that the GST charged by rent-a-cab operator should be made available as ITC to the tour operator who may continue to pay 5% GST rate under Heading 9985.
9. The Govt. should formulate a well-defined and simple procedure and user – friendly conditions / safeguards for
allowing cash refund to the foreign tourist leaving India at the departure airport in respect of GST tax paid by him on
purchase of goods within India and those goods are being taken out of India as part of his baggage or otherwise. The
procedure may be notified in the public domain at the earliest.
10. The Tour and Travel agents may be exempted from e-invoicing procedure for a period of 3 years upto 31.03.2028.
It is expected that due to revival of business operations, the staff strength employed by tour operators will increase and the industry shall be able to comply with e-invoicing and other related procedures.
