For the first time, Hon. Finance Minister of India Nirmala Sitharaman has addressed in the union budget the importance of tourism in India.
In her address, she recognized its potential for growth in employment generation as well as the need for the industry to be tapped. She said that there is a large potential for tourism, especially the youth, to be taken up on mission mode, which she deems very encouraging. She also mentioned that 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism.
The Minister stated that Public Private Partnership (PPP) in tourism was being taken up in earnest with 50 additional airports/heliports to be developed to encourage Last Mile Connectivity, Rs 79000 crores for 100 last mile railway projects, giving a boost to the Dekho Aapna Desh and Swadesh Darshan Scheme, development of a tourism Infrastructure facility in villages especially in the border areas, and focus on “One District One Product.”
President of the Indian Association of Tour Operators (IATO), Mr. Rajiv Mehra said all this is very encouraging, as these will help in the growth of domestic and international tourism to India.
On the other hand, Mehra stated:
“Some of our members who do outbound tourism business will have to close their business as Tax Collection at Source (TCS) has been proposed to be increased from 5% to 20%. This needs to be rolled back immediately.”
“However, none of our demands, like rationalization of GST on [the] tourism industry, exemption of GST on foreign exchange earnings, and refund of tax on shopping under [the] Tax Refund to Tourist (TRT) scheme on shopping for which there is already a provision in [the] GST Act, have been considered.
“Government should consider our demands sympathetically which are very important for revival of tourism post-COVID pandemic.”
Industry captain and Chairman of STIC travel group, Mr. Subhash Goyal, said:
“Even though for the first time, the tourism industry has been prominently mentioned by the Hon. Finance Minister, yet I am disappointed because nothing concrete has been announced for tourism. Also the expectations which we had from the budget this year have not been matched.
“Further, we were hoping that the allocation for overseas tourism promotion and publicity including Market Development Assistance (MDA) will be increased from 341 crores but instead of that it has been reduced to 167 crores. This will have an adverse impact on tourism promotion.
“We were also hoping that there will be an exemption on GST and other taxes based on foreign exchange earnings. Nothing in this regard has happened.
“It was expected that the Finance Minister will announce [a] refund of GST/VAT for tourists in their shopping like Singapore, UK where tourists are refunded their taxes at the airport, but no announcement in this regard has been made.
“We are greatly disappointed that the TCS (Tax Collected at Source) has been increased from 5% to 20% on outbound luxury package tours. This will affect the people who travel abroad for holidays very badly as the cost will become very high, almost prohibitive; as it is, the airfare [has] become very expensive and this tax will make their budget go array. This may perhaps force people to request their friends and relatives abroad to book hotels and packages for them overseas directly, thus depriving … Indian tour operators and travel agents of their earnings.”
