Prudent Budget to stimulate tourism
The
Finance Minister has hinted at, what he calls will be a prudent budget, which will ensure India continues to witness strong economic growth. Hope, unlike the previous instances, when the tourism sector has only been forced to live with additional taxes, the Union Budget 2013-14 will augur initiatives that lessens the tax burden and enhances competitiveness of Incredible India vis-à-vis its competitors.
In line with in the government’s target to doubling the number of foreign and domestic tourists arrivals in the 12th Plan Period, at the outset there is strong case for grant of Infrastructure status to the tourism Industry in the Budget 2013-14. It will help them mobilise much-needed resources to build tourist infrastructure, promote tourism and avail benefits extended to various other sectors that are pro-poor and possess inherent employment creation potential.
In fact, as per the findings of the recent poll conducted by TravTalk, the travel industry rates creation of state-of-the-art infrastructure and enhanced connectivity among the most desired announcements in the Union Budget of 2013-14.However, the industry remains wary of multiple taxation, which many a times result in dual taxation.
The leading trade bodies of inbound and outbound tour operators hope that there will be adequate clarification on the service tax rules announced in the previous budget. The clarification should also clear the air about the use of sub agents by agents at various levels of selling a travel package and incidence of tax at such levels. It has been seen, in such cases tax has been submitted by various agents at different levels of the tax, which amounts to dual taxation.
Incredible India has fabulous tourist attractions that can be accessed round the year, but unfortunately falls in the list of countries that levies the highest rate of tax on tourism and allied services. A reduction in incidence of tax, which, at times, amounts to over 20 per cent cost of building a package, will definitely help market Incredible India to lure international and domestic tourists.