Tourism & Hospitality Sector seek government help to overcome COVID-19 impact

The tourism and hospitality sector has made several recommendations to the government to help it overcome the impact of the COVID-19 crisis. It has also proposed the creation of a National Tourism Council of Chief Ministers headed by the Prime Minister along with the tourism minister.

The Federation of Associations in Indian Tourism and Hospitality (FAITH), in an official statement, said the sector is expecting a concerted strategy to ensure that the tourism industry becomes a mainstay domestic industry. It said measures like an income tax exemption on travelling within India, income tax credits for up to Rs 1.5 lakh when spending with GST registered domestic tour operators, travel agents, hoteliers, and transporters anywhere within the country are required.

“Tourism can drive GDP through capex spending and to increase the intensity of high-quality hotel accomodation in India and MICE, all hotels & MICE venues across the country need to be tagged as vital social infrastructure,” it said. “It is critical to protect the business of Indian travel agents and tour operators and a structured mechanism is required to secure travel agents’ payments in future.”

The Federation of Hotel and Restaurant Associations of India (FHRAI) has recommended that a minimum alternative tax waiver be given to the industry for a period of three years beginning April 2021. It has also requested for treating payments received from international tourists as foreign exchange for the purpose of Export Promotion Capital Goods (EPCG) scheme and that the time to perform export obligation under the scheme be extended by five years.

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Gurbaxish Singh Kohli, FHRAI Vice President, highlighted that over the last eight months, the hospitality industry has been severely battered by the pandemic. He said the upcoming Union Budget will determine which way we go from here as the industry has a lot of expectations from the government. “Since the industry has not received much support so far, FHRAI is hoping that the upcoming Budget will have special focus on the hospitality industry,” he said.

The association also expects the budget to focus on certain longstanding demands such as review of the Kamath Committee recommendations, industry and infrastructure status to hotels, resorts and restaurants across the country, to raise threshold limit of hotel room tariff for charging GST, to allow IGST billing to hotels for corporate and MICE bookings. In terms of policy, FHRAI demanded that hotels, resorts and restaurants should be accorded industry status. It has also asked the government to classify hospitality under the RBI Infrastructure lending norm criteria for access to long-term funds.