What after SEIS denial?

Ever since SEIS has been denied to inbound tour operators, it has become a major issue, with many people raising concerns over destination promotions in foreign countries. The industry is on the same page in terms of getting the benefits back, one way or the other.

Nisha Verma

Piyush Goyal, Union Minister of Commerce and Industry, has made it clear that the Service Export Incentive Scheme (SEIS) is not coming back. The news has not gone down well with the inbound tour operatoras, who claim that they bring in a huge amount of foreign exchange to the country and use the money received as incentive under SEIS for promotion and marketing.

Urging the PM

After being denied SEIS, Rajiv Mehra, President, IATO, has written to the PM requesting him to restore SEIS or introduce an alternative scheme in the new Foreign Trade Policy, as the inbound tourism sector is still suffering and needs hand holding by the government. “Besides, we seek rollback of TCS from 20 per cent to 5 per cent on overseas tour packages announced in the Union Budget. These steps would place the tourism industry on par with foreign tour operators and help them compete with the neighbouring countries. Also, during the current G20 Presidency, where promoting tourism is one key objective, it would be pertinent that the government extends a helping hand to the tourism sector. Post revival of international flight operations and tourist visa, only 30-40 per cent of inbound tourism to India has been revived, which the government accepts. Thus, either SEIS should be restored or an alternative scheme benefiting the tourism sector should be announced in the Foreign Trade Policy 2023. It took nine years to increase foreign exchange earnings to $30.05 billion in 2019 from $ 14.49 billion in 2010. However, at present we have gone back to 2004 level, which was $6.17 billion in terms of foreign exchange earnings,” he says.

Biggest setback

Calling it one of the biggest setbacks for the industry, Jatinder Taneja, Vice Chairman, PATA India Chapter, says that the incentive has not been reinstated so far. “SEIS or similar incentive schemes have been going on to support inbound tourism for the last many years in the form of EPCG, SFIS and SEIS forms. This incentive has been helping the industry immensely to stay competitive in the international market and generate better business and earn much more foreign exchange for the country. In the absence of any incentive scheme, the product in India will become more expensive and inbound business would surely suffer,” he adds.

Fingers crossed

Ravi Gosain, MD, Erco Travels and Vice President, IATO, claims that SEIS was the biggest incentive for the inbound industry. “Unfortunately, in FY2023, we didn’t see SEIS continued. We knew it will be like this, but we were trying with Ministry of Commerce. We held several meetings at secretary level, joint secretary level, and at ministerial level as well. They categorically denied it. Ultimately, IATO has written to the MOT because we want either this scheme or any other to come back, as we need it now, more than anytime,” he adds.

Need handholding

Agreeing that discontinuation of SEIS by the government was a wrong move, Sanjay Razdan, MD, Razdan Holidays and Honorary Secretary, IATO, shares that they have heard the government is giving some duty drawbacks to the exporters. “Since inbound tourism also brings a lot of foreign exchange in the country, we thought that they will listen to us. However, we are not positive about that plan. IATO has written to the PM, where we have mentioned all the points and what was discussed with Mr. Piyush Goyal. As a tour operator, I think it’s very important for the government to help us because we need handholding. Let’s hope that our PM can intervene and do something for the tour operators,” he adds.

Unfortunate move

Calling the decision unfortunate, Deepak Bhatnagar, MD, Aamantaran Travel Company and EC member, IATO, insists that SEIS was not only a monetary benefit which tour operators were getting.

Give GST benefit

Saying that India is becoming an expensive destination to market, Kamleshwaran, CEO, Southern Skies Tours & Travels, suggests that the government needs to find ways to give sops to the hospitality industry to balance the input costs.

Need to push inbound

Manoj Kumar Matta, MD, Oriental Vacations & Journeys, and EC member, IATO, says, “The overseas marketing offices have been closed. I think government’s intention is to only promote domestic tourism. It has been creating infrastructure, which is good for everyone, and they want to make India Atmanirbhar. But why they want only inbound tour operators to be Atmanirbhar?” he questions.