New govt, old demands, now what
With the Union Budget just round the corner, spoke to the industry leaders. Industry status for tourism and eliminating service tax topped the priority list of stakeholders.
This year’s budget will mark a change with the Make in India policy. Tourism holds greater potential for job creation even with low investments and its impact can reach distant locations, it can boost foreign exchange earnings. We are confident our long demand for extending Export Status to tourism will get priority consideration. We are confident multiple taxation part will be done away in the budget. This government is very dynamic and we want to be with them. But there is also a strong need for infrastructure. We, the stakeholders (who are in a position to invest), must be encouraged to invest. There has to be a cut in taxes, excise duty and customs duties. Secondly, service tax should be collected by the airlines itself. It should be inclusive of all the commissions that the airlines are paying to people rather than asking the airline to bill the agent and then the agent bills the customer. It should be simplified.
We have already submitted our paper on how outbound tourism brings in more foreign exchange for the country. The report was prepared by Ernst and Young. We want the government to acknowledge the importance of outbound tourism and thus, exempt us from service tax. Also, we need to give special status to the tourism industry. The industry needs more sops to realise its full potential.
Guldeep Singh Sahni
President, OTOAI After being ignored for several years, India's travel trade industry, now, has a reason to look forward with renewed optimism. We have a Prime Minister who is very supportive and encouraging towards the socio - economic benefits of tourism. He is convinced about tourism being a game changer. Irrespective of individual policies, industry per se, will benefit. We will have to see how the new AAP dispensation in Delhi reacts, because Delhi is a key pivot of the Golden Triangle.
President, TAFI Service tax should be completely removed from sale of rooms, food and beverages. Hotels should be given similar financial benefits as the infrastructure sector with the ceiling for investment reduced to ` 25 crore against the existing
` 200 crore. Export Promotion Capital Goods (EPCG) and Served from India Scheme (SFIS) licensing norms should be revisited and made simpler for the industry. Loans for building hotels from banks must have a tenure of a minimum 10 years as opposed to the current three years, which makes no sense whatsoever. Finally, a national policy should be made which recognises the value of tourism as an engine of growth for the Indian economy and dramatically reduces the ridiculous number of licenses which are required to be maintained by this industry.
President, HRAWI This budget will be a roadmap to how the NDA government will get to the figure of 20 million international tourists by 2020. Our expectation is that the finance minister should permit and classify the hospitality sector as a permissible infrastructure activity for accessing tax-free bonds under Section 54 EC through Notified Financial Institutions. The Union Government through an appropriate legislative amendment should ensure that all states recognise tourism as an industry so that hospitality establishments can avail incentives and concessions under the industrial policy of state governments viz. property tax, electricity and water tariff on industrial tariff, land banks for budget hotels, interest subvention schemes and capital subsidies, etc. There should be rationalisation of taxes and early implementation of GST. Also, the 5:25 scheme of RBI should not be limited only to new borrowers but also be available for refinancing the debt of existing and under implementation projects in all eligible sectors.