TravTalk India Online Magazine
The industry’s expectations from Budget 2021-22 seem to be rather unpropitious but the most anticipated. Will the upcoming announcement be the last straw in tourism’s undoing or a ray of hope for it? Experts remark…
Jyoti Mayal, President, TAAI
We have asked for export competitiveness, domestic leadership, capital formation and removal of inefficiencies. A strong national tourism council should come into place under the leadership of the PM. We have also talked about the concurrent industry status. We need export status. SEIS rate should be pegged at 10 per cent for both tour operators and hotels. We need a global M!CE bidding fund as well. Also, we need to underwrite funds for travel agents and tour operators, because in case of collapse of aviation, travel agents need to be protected either through an escrow account or an insurance account. Also, the entire structure needs to be looked into where TCS, GST and IGST are concerned.
Gurbaxish Singh Kohli, Vice President, FHRAI
In our country, hotels and restaurants are treated as a non-industrial commercial customer and deprived of privileges extended to industries. We request the Finance Minister and Tourism Minister to bring tourism under the Concurrent List of the Constitution along with granting industry status to the hospitality sector. Lack of adequate support from the government is impeding the survival and revival efforts of the tourism sector. FHRAI has been vociferously advocating two key demands for decades – bring tourism under Concurrent List and grant Industry status to the hospitality sector.
Pradip Lulla, Acting President and VP, TAFI
Some sort of tax stimulus should be given in terms of tax benefits as is given in terms of LTC to government employees. The government should also consider tax benefits like write-offs if one uses `5-10 lakh, with proper invoices. A rebate on income tax should also be given. Today, the monetary policy is very accommodative, and the Reserve Bank has reduced the interest repo rate to only 4%, but still in the travel space, the best interest that we can get from MSME is basically not less than 9.5-10%. And with this reduced kind of business, it is not affordable.
Pronab Sarkar, President, IATO
We have already shared our expectations with the government, out of which five major points are: deemed export industry status in tourism on a par with the IT sector, removal of the cascading effect on tourism services as the industry is heavily taxed, removal of GST on foreign services for foreign tourists, withdrawal of TCS on overseas tour packages and foreigners visiting India/ going to neighbouring countries, and extension of SEIS benefits for another five years and immediate release backlog of 2019 and 2020 scripts, which are not received yet.
Subhash Goyal, Hony. Secretary, FAITH
This year, my wish-list is that SEIS should be increased for the tourism industry. Owing to COVID-19 we were the first to get affected, and will be the last to recover. Hence, we need a lot of Budget-related support as far as taxes are concerned. We hope that a tax holiday of one year will be given, or a nominal — both corporate and income — tax of 5 per cent or something similar will be charged till we are back on our feet and till all international flights re-start. Then only can we hope for the revival of the economy as well as the tourism industry.
Vinayak Koul, Secretary, ATOAI
An export status for tourism service providers has been a long-pending demand. State-wise industry status and an enhanced publicity campaign covering different subjects with special focus on adventure and natural heritage products has also been our demand for a long time. Other demands include a stimulus package for tourism’s revival and waiving of customs duty on import of adventure products. Lastly, building last-mile connectivity for remote areas so that travel time to adventure destinations is minimised and help in improving our products would go a long way.
PP Khanna, President, ADTOI
The economy will grow because people have started domestic tourism, and we are expecting the government to incentivise domestic tourism, and offer tax benefit and rebates. Also, instead of identifying a few tourism zones like last year, the government should declare at least 2-3 tourism zones in every state and Union Territory. That way, we will have at least 70 tourism zones, which would allow tourists to explore India entirely and stay up to a month instead of the usual 10-15 days. The Centre should also support the state governments and associations through a fund.
Rajiv Mehra, Vice President, IATO
The amendments related to Goods & Services Tax (GST) are not covered in Budget, so there is nothing to talk about there. An issue that I hope will be addressed is removal of TCS. We also want a final decision on the SEIS issue pertaining to our share from 2019-20, which we haven’t received yet, and also that effective guidelines and policies be announced for 2021-25. We have also written to the government to grant industry status to the tourism sector. Let us hope and see that these things are covered in the upcoming Budget.
Sunil Kumar, President, UFTAA
The government has incurred high cost to help mitigate challenges faced by the pandemic. They will introduce smart moves to raise revenue through several initiatives. As they do this, they will offer relief to the larger percentage of tax payers at the lower levels. This is one way to sustain popularity. On most or all occasions, our industry has been disappointed in the past. This year, the tone may be different since tourism is visibly the most affected. Our industry may see some attention by the government, though it may not meet our expectations. From these reliefs, hospitality may benefit the most; aviation may get some attention.
Riaz Munshi, President, OTOAI
I don’t have any expectations from the upcoming Union Budget 2021-22 as far as tourism is concerned. All these years, we have been making representations, but we haven’t got anything. In case we get something, it would be welcome and we will be obliged that the government took us into consideration, but we neither have hope nor any expectations now from the Union Budget. I believe that if at all, the focus will be on the inbound and domestic markets. I don’t think there will be anything for the outbound market in the upcoming Union Budget.
Ranjeet Das, President, TOAA
We hope for initiatives that will boost the ailing travel sector in Northeast India. The government has to focus on protecting jobs and businesses through more effective programmes and moratorium extension among other relief support. The Budget should provide special focus on our region’s tourism infrastructure facilities, outreach programmes and upskilling/reskilling which needs to be given priority. High airfare to Northeast is always a constraint, so a scheme to cap airfares to make it affordable to all needs to be examined. We appeal to the government to reassess and provide much better support to the tourism industry.
Vishal Jain, President, NETTA
I would like to highlight the recent development of TCS that has been put across/imposed on travel agents. TCS of 5% is an additional workload for the industry which is lean on manpower and financial processes. Hence, we expect it to be rolled back by the Finance Minister. Another big concern is working capital, because most of the travel companies are facing a financial crunch. A lot has been committed by the government, but very little has been done. Hence, there should be some concrete steps that the government should be taking towards this.
Ajay Sarin Chairman, IAAPI
IAAPI is thankful to the GST Council for reducing GST from 28% to 18%, though still on the higher side when compared to global GST rate for amusement industry. Lowering of GST rate will benefit families to visit amusement parks in large numbers as the entry ticket will be more affordable. We request for 12% GST with Input Tax Credit to promote this industry. We also hope we are provided Social Infrastructure status and earmarked land while developing metros, smart cities and tourist destinations. A customs duty waiver is also recommended on import of rides, equipment and spares under tourism project.
Manav Soni, Chairperson – Eastern Region, TAAI
For this Union Budget, we will be looking forward to an equal and more leveraged taxation. There is a disparity between the taxation for travel agents working from their office and Online Travel Agents (OTAs). There are many OTAs that are not registered in India. They do not come under the same banner as most of the agencies do. For anybody who wants to do business in India, the taxation should be equal. Also, more relaxed GST norms and procedures are needed as this industry has gone through a tough time. The only support we can get from the government is in taxation.
Vishal Suri, Managing Director, SOTC Travel
We look forward to the Union Budget 2021 bringing in concrete measures that target revival of the economy and boosting consumer sentiment. With a focus on the domestic tourism sector in the current era of travel, there is strong potential to develop smaller cities/towns in India for tourism in line with Prime Minister’s vision of being ‘Atmanirbhar Bharat’ and further strengthen ‘Make in India’. We hope to see proactive reforms, supportive policies and budgetary allocations, with immediate waiver of TCS for the tourism sector that is critical in stimulating demand.
Hemendra Singh Jadon, Chapter Chairman – MP & CG, TAAI
The service industry has been severely affected by the pandemic. Tourism was the first industry to be affected and will likely be the last to recover. We had a lot of expectations from the government and we had demanded some policy changes and exemptions in the aftermath of COVID-19. But, the industry did not receive anything. We are therefore hoping that this Budget will have something for the tourism and the service industry at large. We are constantly in touch with the Madhya Pradesh government and have sent some proposals to them already.
Manish Kriplani, MD, Baywatch Travels
I think, whatever calculations and policies the government makes, the final picture is that they should leave the customer with more cash in hand. In terms of taxation, I think they should increase the standard deductions which should give some tax benefits to all of us. Also, I feel that medical reimbursement should be there, and insurance or travel allowances should be increased. This used to be there earlier, but I think in 2018 they withdrew this. I feel that such reimbursements should come into the system again. We want consumers to have more cash in hand.
Ramesh Marwah, CEO, Dex Group
It’s very difficult to predict what the Budget will entail, but if a message goes out that the industry needs support, then there are 3-4 simple ways in which the industry can be revived. Firstly, TCS can easily be abolished and can be brought back when things are normal. If the GST were to be brought down or brought to a level that the industry can handle, it will be a huge support. If the government wants to support the industry, they will also have to look at extending the moratoriums on loans and bringing loans to a softer level with miniscule interest.
Ankur Bhatia, Executive Director, Bird Group
A long-awaited measure the government must address in Budget 2021 is granting infrastructure status, which would allow hotels to avail electricity, water and land at industrial rates as well as better infrastructure lending rates. In the next 6 to 8 months, the government can look at granting exporters benefits under the SEIS and EPCG schemes for some more time to help them tide over the pandemic’s impact. Auto-renewal of licence fees is also one of the pressing demands of the sector. We also urge the government to allow GST input credit on the entire project cost for hotel developers.
Madhavan Menon, CMD, Thomas Cook (India)
Domestic tourism requires priority support or swathes of tourism-dependent communities will languish and with it, rapid dwindling of our precious local art forms, heritage and culture. Budgetary outlay that retains long-term impact via infrastructure development is equally essential, as also health, safety and sanitation. I also look forward to priority action on soft loans to finance working capital, incentivising tourism spends by providing income tax concessions, payment of overdue SEIS benefits, easing of indirect taxes and waiving of TCS to help aid recovery.
Deep Kalra, Founder and Group Executive Chairman, MakeMyTrip
In the short-term, the industry is looking for assistance in the form of rationalisation of taxes, extension of moratorium period, and waving of certain statutory obligations. We hope that in the upcoming Budget, the government takes note of the sector’s role in the entire economic value chain and makes the long-due decision of including travel & tourism in the concurrent list. As domestic tourism holds key to recovery, IT deductions on domestic travel undertaken by the taxpayer will encourage people to travel more domestically, further benefitting the ecosystem.
Amaresh Tiwari, Vice Chairman, ICPB
The government needs to prevent Indian M!CE events from going abroad by offering a 200% weighted income tax expense benefit to Indian companies that undertake M!CE events in India. We also recommend the government to create an ‘India MICE Fund’ and under this, launch ‘India MICE Advantage Programme’, ‘MICE Ambassador Programme’, ‘Subvention Scheme’ and a bidding fund. We need to enable IGST for our hotels to complete the GST chain and enable GST set-offs for companies undertaking M!CE in states other than their state of registration.
PK Gupta, MD, Peekay Holidays
As a special case, I would request Government of India or the Finance Minister to reduce the GST or completely withdraw the GST for the entire tourism sector at least for one year in the upcoming Union Budget for 2021-2022, because the tourism sector is the worst affected by the COVID-19 pandemic. Secondly, for the outbound industry, I would request the government to consider withdrawal of GST as well as TCS imposed on outbound tours because it is not feasible for any traveller to pay five per cent GST and five per cent TCS on the package amount.
Manav Goyal, Director, Adyar Gate Hotels, Chennai
The hospitality industry is a complex mix of logistics, supply chain, inventory management, kitchen production, and services and entertainment. Unlike traditional manufacturing industries, hotels in India, like in other countries, require huge investments and capital outlays to set up and upgrade products, service, design and technology. We are a highly labour and capital-intensive business with long gestation periods of 15 to 20 years. Hence, when our hospitality industry is pegged against other sectors for lending, it is inequitable and not appropriate.
SK Mohapatra, Executive Director, MAYFAIR Hotels & Resorts
Coming in the backdrop of the worst crisis that the tourism and hospitality industry has ever witnessed, expectations will be very high from the upcoming Union Budget for 2021-22.. Though the threat of COVID-19 is gradually subsiding, crippled by its devastating impact, the road to revival is still out of sight. On the tax front, we expect a rationalisation of rates across all categories of services.The government should reconsider its decision to redirect the LTC money of government employees to buy consumer goods, as it will adversely affect the business prospects of our industry.
Lakshyaraj Singh Mewar, Executive Director, HRH Group of Hotels
Budget 2021-22 needs to take an overview of the hospitality industry, putting the focus on all the segments of the industry. That is the first challenge. The second challenge is understanding the financial requirements of all the players in each segment. The government needs to address this specific problem and ensure we have cash on hand to honour our payments. We are in need of a ‘direct transfer’ that can benefit us all, and equally.State governments also have a big role to play in identifying all the key segments and players who need financial assistance or tax holidays.
Inputs by TT Bureau
