Travel Agents Association of India (TAAI), is the premier, nodal, and largest Travel and Tourism Association in India. With the Union Finance Budget round the corner, we expect that the Government undertakes our suggestions for good governance and ease of doing business for our trade.
Travel and Tourism contribute to nearly 10% of GDP. Indian trade contributes to over INR 2 Lac Crores of Foreign Exchange Earnings through tourism in India. This is expected to accelerate at least by 15% in the next 2 years. We expect that the Finance Ministry (FM) outlays plans to enhance and boost travel and tourism by ensuring adequate support in ease of doing business.
Jyoti Mayal, President TAAI, stated that we believe the Budget 2021 should be focused more on spendings to enable economic growth, what better area to spend in than tourism to generate more cash flow & earnings to enable enhancement of infrastructure.
One India One GST: We have already appealed to have a uniform GST across India whereby input tax credits can be taken for services utilized across the country. The GST for tour operators should be at 1.8% with full setoff, being 18% on an average margin of 10%. Interstate credit of GST is not available to travel agents and tour operators on IGST and the same should be considered at par which shall not only benefit the corporates but the consumers are large. The same with airlines on the point of departure.
We are expecting the FM to ensure LTC benefits not utilized this year due to the pandemic should be permitted to be carried forward in the coming 2 years. Further to boost the economy all expenses made for travel, tourism, MiCE, adventure, domestic and religious travel, by the taxpayer should be fully exempt from income tax for the next 2 years, stated Jyoti Mayal.
The FM should also ensure 10% SIES credit to be adjusted completely under income tax. To ensure growth in tourism and all incomes from foreign exchange earnings should be given a tax holiday for a period of 2 years. TCS too to should be rescinded as it serves no purpose of tax collection and is only adding compliances of our members, she added.
Jay Bhatia, Vice President of TAAI, stated that Travel and Tourism trade should be granted an Industry status and be included in the concurrent list on a unified basis across the country. This shall help to produce high-quality service levels. All licenses and standardization of regulations, processes, payment schedules, skills, and knowledge development shall get a boost. Further adding to the appeal he stated that we have requested that a single employee benefit/protection/security policy benefit be adopted under one proviso which shall take care of labor welfare, social security, industrial safety, and health of self and family, child and women labor, etc. on the basis of education/skill/wages/salaries, etc. and maintaining one wage code across the country with Central and State Governments.
In our recommendation to the Ministry, we have also placed that a Structured Insurance Mechanism is required to secure the future of travel agents against principals, viz a viz securing all payments of the consumer and the traveler. The proposals on escrow or guarantee or underwriting by the Government towards all airline operators to and from India must also be secured in some from of financial security.