Tax and in­fra­struc­ture plague in­bound

The Min­istry of Tourism (MOT) is tak­ing up many ini­tia­tives to boost the ar­rival of for­eign tourists to In­dia, how­ever, in­bound tour op­er­a­tors claim that they face many chal­lenges. While the new tax regime re­mains one of the ma­jor is­sues, the right pub­lic

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When it comes to chal­lenges in the in­bound sec­tor, noth­ing has changed for a long time. We have the same kind of sit­u­a­tion ev­ery­where. There are no new des­ti­na­tions com­ing up. What we need to do right now is con­cen­trate on the ex­ist­ing des­ti­na­tions, pro­mote them and make them fruit­ful. The cur­rent tax­a­tion struc­ture is also a de­ter­rent as there is a lot of con­fu­sion within the fra­ter­nity re­gard­ing the same. As part of IATO, we are try­ing to re­solve the is­sues of the mem­bers, but it will take some time for things to set­tle down.

Cur­rently, the big­gest chal­lenge is the new tax struc­ture, which would make us un­com­pet­i­tive in the South­east Asia re­gion. Sec­ond con­cern is the im­age of the coun­try. From an eco­nomic per­spec­tive, In­dia is get­ting bet­ter, but from a tourism per­spec­tive, things like crimes against women and the bor­der sit­u­a­tion are af­fect­ing the de­ci­sions of people to travel to In­dia. While In­dia re­mains a po­ten­tial des­ti­na­tion for her­itage and cul­ture, there are in­fras­truc­tural chal­lenges. Apart from that, clean­li­ness of mon­u­ments and the is­sue of guides also re­mains a chal­lenge.

Cur­rently, GST is the big­gest is­sue for in­bound travel. By levy­ing as much as 28 per cent GST on ho­tels and 18 per cent on AC restau­rants, the govern­ment is mak­ing In­dia ex­pen­sive. Thus, In­dia can­not re­main a com­pet­i­tive des­ti­na­tion for trav­ellers, as it would be­come around 30 per cent more ex­pen­sive than oth­ers. We were ear­lier think­ing that tourism would be given the same sta­tus as ex­port un­der 5 per cent GST, but that did not hap­pen.

The ma­jor chal­lenge cur­rently is GST. We have not been able to send quo­ta­tions to our agents as we have to get our brochures ready for the up­com­ing sea­son, which starts in Oc­to­ber. We are al­ready late in do­ing that as usu­ally this is done around AprilMay only. An­other ma­jor prob­lem is the short­age of pro­mo­tional bud­get for In­dia Tourism. This re­sults in de­creas­ing par­tic­i­pa­tion in in­ter­na­tional fairs and the pres­ence of In­dia is not seen at these places. The neg­a­tive im­pact of this will be vis­i­ble in a pe­riod of one to two years.

The big­gest chal­lenge that the tourism in­dus­try is fac­ing to­day is GST, where 28 per cent tax is be­ing charged on ho­tels and mul­ti­ple taxes are be­ing levied on tour op­er­a­tors. This would make In­dia very ex­pen­sive and we are go­ing to out­price our­selves from our neigh­bour­ing coun­tries like Thai­land, Malaysia, Sin­ga­pore and Sri Lanka. If the govern­ment is se­ri­ous on de­vel­op­ing tourism, then taxes for the tourism in­dus­try should not be more than 5 per cent through­out the board and it should be on value ad­di­tion only.

The in­ter­na­tional mar­kets are slow and In­dia’s rep­u­ta­tion as an ex­pen­sive des­ti­na­tion and neg­a­tive pub­lic­ity of var­i­ous is­sues in the coun­try are prov­ing to be a chal­lenge. There is over­all eco­nomic down­turn and an un­pleas­ant im­age of the coun­try in tourists’ mind. In ad­di­tion, there are dif­fer­ent kinds of taxes, and hence, there is no growth. Tourism de­part­ment is say­ing many things, but there is not much hap­pen­ing on ground. Di­rec­tors of the over­seas of­fices of In­dia Tourism have not been ap­pointed as yet, ow­ing to which one can­not ex­pect much in terms of pro­mo­tion.

E M Na­jeeb In­dia Travel Award Win­ner and Chair­man & Manag­ing Di­rec­tor, Air Travel En­ter­prises Group of Com­pa­nies (ATE)

Sub­hash Goyal Awards 2014, and Chair­man, Stic Travel Group

Ra­jiv Mehra MD, Uday Trav­els and Vice Pres­i­dent, IATO

Deepak Bhat­na­gar MD Aa­man­taran Travel

Ra­jesh Mudgil MD Planet In­dia Trav­els

Ravi Go­sain Di­rec­tor Erco Trav­els

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