Nakul Anand was disappointed with the 2021 budget announcement and shared his views on what had gone wrong.

FAITH, the association of all national associations representing the tourism, travel and hospitality industry in India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) and partner AIRDA, looked forward to the Union Budget FY 21-22 with great expectations. However, the budget showed no signs of relief for the sector.

To express his disappointment Nakul Anand, Chairman, FAITH stated, “The lack of immediate direct budget support has disappointed the Indian travel and tourism industry.”

The Finance Minister announced budget proposals to improve rail, road, ports, MetroLite infrastructure and PPP in buses, airports and ports, including Vista buses on tourist routes.

Anand called these infrastructure measures helpful in stimulating tourism in the long term and said: “These infrastructure measures can stimulate tourism in the long term, but only if they are implemented. The measures to change capitalization, turnover and small business support for sole proprietorship can assist the micro and small tourism entrepreneurs in strengthening their organized state. However, the new agriculture will be another damper. “

Anand said he was unhappy with the lack of budget attention the tourism, travel and hospitality sectors had received. He also stressed that the sector was looking for support for immediate and short-term measures to revitalize the sector.

Previously, FAITH had proposed the creation of a National Tourism Council of Prime Ministers, led by the Prime Minister, together with the Minister of Tourism to ensure that there is an immediate national common tourism vision and post-COVID recovery action plan for the center and the state.

In addition, there has previously been an urgent need to give the tourism sector a common industrial status across the country by adding it to the list of concurrent companies in order to better manage the sector. But even that was not mentioned in today’s budget speech by the finance minister.

Anand is of the opinion that in order to ensure optimal exploitation of the export potential of Indian tourism after COVID, the tourism industry should be fully recognized at the level of goods exports, the export income from tourism should be made tax-free and the tax revenue in tourism income should also be valued at zero .

“An SEIS of 10 percent for all foreign currency earners in tourism should have been in place for 5 years to ensure recovery after coverage. The SEIS for 2020-2021 should have been published, ”he said.

In addition, another question that was not addressed during the budget speech related to the Global MICE Bidding Fund. The Global MICE Bidding Fund should have been set up with £ 500m to restart immediately and double the proportion of Indian mice.

“In order to communicate a tourism-ready India, Indian missions abroad should have been activated in every country with tourism resources for maximum reach,” said Anand.

“The global brand budget required a corpus of at least £ 2,500 million to enable subbranding of three tourism segments, Indian MICE, Indian Adventure and Indian Heritage, under the main brand Incredible India, and to extend these industries global reach after COVID To ensure that the tourism industry would have become a major domestic industry, an income tax exemption was required for travel within India with income tax credits of up to £ 1.5 when spending with GST-registered domestic tour operators, travel agents, hoteliers and Transportation companies made in the US were land, “he claimed.

The recommendations previously sent to the center suggested encouraging Indian companies to run domestic mice (meetings, incentives, conferences, and events) with a weighted income tax expense of 200 percent. That was again not taken up in the speech.

A natural and cultural heritage restoration fund should have been set up with a corpus of at least £ 2,000 million that would have resumed post-COVID tourism and promoted sustainable and responsible development in every adventure tourism and cultural tourism industry.

He also highlighted the need to provide a seamless tourist transportation experience after COVID. To this end, it has been proposed to standardize all tourism transportation taxes and pay them at a single point in order to make business easier. But nothing was mentioned in this regard either.

“In order to increase the intensity of high-quality hotel accommodation and the MICE infrastructure in India, all hotels and mice across the country had to be labeled as important social infrastructure. This would have boosted demand for investments in the hospitality industry after the pandemic, ”he explained.

“COVID-19 has damaged travel and tour operators. It was vital to protect the Indian travel agents and tour operators’ business and a structured mechanism was required to secure travel agent payments in the future and ensure the security for the travel agents and tour operators to survive. This was critical as travel agent payments to principals are unsecured loans and some form of mechanism, whether escrow or guarantee or underwriting, had to be in place to ensure travel agents and tour operators’ money stays safe, ”added he added.

The recently introduced TCS, which made Indian travel agencies globally uncompetitive, should have been abolished immediately.

It was important to include the overseas global OTAs operating in India in the tax network of GST and other taxes in order to create a level playing field with Indian travel agents and tour operators.

There was a need for 100% tax exemption and permission to write income / TDS / GST etc back to travel agents and tour operators for their transactions if the airlines were dissolved or closed. This would have protected them and also the Indian consumers.

FAITH Associations were also disappointed with the neglected issues of GST policy in the tourism sector.

Anand said, “For post-COVID resuscitation, it was important to lower the 18 percent GST category for hotels to the 12 percent GST category. There was a need to offer full-set restaurants a 12 percent GST option. Since many state taxes were levied on tourism, travel and hospitality at the state level, the GST for fuel, interstate transport taxes, electricity tax, alcohol consumption tax and also property taxes had to be subsumed, the tax on parking fees had to be provided as input tax costs. “

“To support the resuscitation, the GST for tour operators should have been reduced by 1.8 percent if fully offset. Hotels should have been enabled to collect IGST so they could provide GST credits to Indian companies hosting intergovernmental events and ensure India’s MICE is maintained domestically after COVID, ”he added.

In closing, he concluded: “The failure to address any of these critical measures in the budget announcement has left the industry in a state of shock and dismay. The tourism, travel and hospitality industries are grappling with the worst crisis of the century due to the effects of Covid 19, the revival of which will not be minimal for the next fiscal year until vaccination is complete and no side effects are observed in all source and target markets are . The FAITH Associations had worked intensively with all government actors to immediately get Indian tourism out of the covessional recession conditions in the crisis of the century for tourism, travel and hospitality. While infrastructure measures announced as budget announcements can boost tourism in the long term, the opportunity to provide immediate support was unfortunately missed. “