Travel and tourism industry wishlist from the union budget 2020: Brijesh Modi, Chief Financial Officer, Thomas Cook India
Travel and tourism industry has emerged as the third largest forex earner for India writes Brijesh Modi.
The travel and tourism industry is a crucial contributor to the growth of the Indian economy with a powerful multiplier impact on employment generation and we are hence confident that in the Union Budget 2020 the government will strengthen the industry with continuity of its tourism-friendly policies to give fillip to India’s Inbound, Domestic and MICE segments. India is the 8th largest country in the world in terms of contribution to travel & tourism GDP. The sector generated USD 247.3 billion (INR 16.91 trillion) in 2018, growing 6.7% during the year and accounting for 9.2% of the total economy. The country is largest market in South Asia and has been the key driver for growth of the sector in the region. Travel and tourism industry has emerged as the third largest forex earner for India. At US$28.9 billion, India’s Foreign Exchange Earnings (FEE) for tourism constituted 5.4% of total exports. The sector has been a key source of employment as well, directly accounting for 26.7 million jobs in 2018. By 2029, the sector is expected to provide employment to nearly 53 million people, directly and indirectly. Hence it is important to work on fast-tracking the growth of this sector.
Our wish list from the Union Budget 2020 is as under:
- Newer sectors, travel circuits to be created and encouraged through incentives and promotion. North East of India provides a lot of opportunities for tourism and concerted efforts from airline plus lower GST rates on hotels can help in boosting the tourist arrival there.
- Sustained delivery on the recent initiatives on UDAAN, HRIDAY, PRASAD
- In order to increase the disposable income in the hands of individuals, reduction of personal income tax rates and capital gain tax at the same time wider the tax payers base
- Give tax benefits around travel to certain sectors like North East, Kashmir and generally on domestic tourism as well as to promote rural, cultural tourism
- Tax benefits for setting up ticketing hub in India – again linked with Make in India
- GST: Compliances and vendor reconciliations need to be simplified and made user friendly. Speed of implementation of changes to be moderated, Setting up of Knowledge centres for MSMEs for GST compliances and requirements
- Use of carrot approach (preferential treatment, incentives) on compliances and governance in addition to the stick approach
- Aviation industry is an integral part of travel and tourism and we request for a direction and mechanism around airfare monitoring, on usage of New Engine, on divestment of Air India
- Rail tourism has a great potential and it is a sustainable mode of tourism. More faster trains, improved sanitation, cleanliness at various railway stations will help in promoting rail tourism
- Infrastructure required for Cruise tourism needs to be improved, this tourism has a huge potential
- Step up investments and create demand, keeping in mind the fiscal deficit
- Various Export incentives need to continue for tourism sector
- Core sectors like automobile, telecom, real estate to be fixed as these sectors augur growth of other sectors
- To promote the digital economy, incentives to be given for digital transactions, cashless payments, reducing the limit u/s 269ST of Income tax Act from Rs 2 Lakhs to Rs 1 Lakh, waiving of MDR charges on digital payments completely
- Clarifying the issue of Air Travel Agent being subject to Tax Collection at Source. The amendment of the proviso to section 16(2) in claiming input tax credit on the tax charged by the airline will also help in providing for the specific scenario of payment made by corporates or registered passengers to a travel operator.
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