Major players in the country’s travel and tourism industry on Thursday presented the government with a proposal including a package of measures needed to revive the besieged sector. Led by the policy advocacy organization Federation of Associations in Indian Tourism & Hospitality (FAITH), a group of leading hospitality industry associations have demanded a reduction in the rate of the Goods and Services Tax (GST), tax advantages and a fund dedicated to the sector.
According to them, the Covid-19 pandemic has wreaked havoc in the travel, tourism and hospitality industry, causing a loss of Rs 15,000 billion and endangering up to 40 million jobs. As travel restrictions continue in several locations and travelers shy away from tours, a revival is still out of sight.
In order to reduce the burden on business owners and consumers, agencies have demanded a reduction in the GST for tour operators to 1.8 percent, with full compensation, from the current 5 percent. In addition, a reduction in the current rate of 18 percent GST on hotel rooms costing Rs 7,500 per day or more to 12 percent has been proposed. “And gradually it should be further reduced, to less than 10% with full offsets, in line with global trends,” they said. In addition, citing examples from Singapore, Thailand and Japan, the body has requested a tax exemption on travel to India for expenses of up to Rs 1.5 lakh per year, which will help to reduce the burden on consumers.
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According to Nakul Anand, Indian tourism, along with associated sectors, accounts for 9-10% of the country’s GDP and will need to reach $ 500 billion for India to meet its stated target of $ 5,000 billion in GDP. “This would more than double the economic footprint of tourism from what it is today. Our industry would seek to more than double the jobs that tourism influences from about 5 crore currently to over 10 crore, ”he said. However, for its revival, the industry needs government support. Anand said an interest-free Covid-19 fund should be set up by the Tourism Ministry that will help businesses cover fixed personnel and operating costs.
“States must synchronize their border policies in areas outside containment zones. India’s domestic tourism market is estimated to be the second in the world, in terms of size, after China. However, our tourism penetration of domestic tourists by our population is low, ”said PP Khanna, President of the Domestic Tour Operators Association of India. He insisted that unless relaunched earlier, the industry could miss the opportunity to double its size.
Sharat Chandra, Treasurer of the Indian Tourist Transportation Association, said, given that the lack of cash flow is currently the most pressing problem, “It is essential that the unused GST credit that belongs to the government be returned to the operators. . This will inject liquidity into the system. In addition, it is important to have an exemption from the payment of the insurance premium for tourist transport vehicles for the year until the business environment normalizes, ”he demanded.