Pre-budget expectation quote | Thomas Cook and SOTC
Mr. Vishal Suri, Managing Director, SOTC Travel Limited.
The travel & tourism industry supports one in 10 jobs and provides livelihoods for a significant number of people in both developing and developed economies. As the sector recovers from the effects of the pandemic, we seek the Government’s support for economic relief in the upcoming Union Budget with lower taxes and incentives to help boost the road to recovery.
The industry appreciates the Government’s support to enable revival and strengthen the sector for which we anticipate rationalization of tax structure via reduced GST, TDS rates, and TCS on LRS remittances; also, clarification on the applicability of collection by e-commerce operators under section 194O, this will help reduce complexities and enable the industry to focus and accelerate businesses further. Further, corporates should be offered incentives for organizing meetings and conferences in India through partial or full tax exemptions on the expenses incurred, this will help boost domestic travel and tourism.
We seek assistance from the Government in enhancing the structural transformation that is needed to build a stronger, more sustainable, and resilient tourism industry. We need to focus on the tourism sector as a sustainable engine for economic growth and development.
Mr. Mahesh Iyer – Executive Director & Chief Executive Officer, Thomas Cook (India) Limited
The Travel & Tourism sector is a significant contributor to India’s GDP and the planned National Tourism Policy intends to target a GDP contribution of $1 trillion by 2047; $150 billion in 2024. In addition to Foreign Exchange earnings, our sector provides valuable skill development and employment generation across travel, tourism, and allied industries. Support from the Government would be invaluable in expediting revival post-pandemic and harnessing the benefits of this powerful sector via rationalization of tax and budgetary outlay on infrastructure.
Our key expectations for the upcoming Union Budget would include: lowering of TCS for outbound travel and LRS remittances; LTA expansion to once a year against twice in 4 years to boost domestic tourism; reduction of TDS rate as this could adversely impact corporate travel spending; exemption of travel agents from section 53 of GST as it forms a major compliance and working capital challenge for travel agents (there is no ultimate loss of revenue to the Government, given that airlines already discharge tax on their sale).
Clarification on the applicability of Section 194O on E-commerce would be of value – as the current definition covers facilities for ease of booking, even if the transaction is done offline (such facilities should be kept outside the levy of TDS for Travel companies). Additionally, enhanced coordination between banks and CIBIL for timely and accurate information to enable quicker ECLGS loan disbursements.
From an inbound perspective: an alternate mechanism for SEIS to be developed for the revival of the Inbound Tourism sector; granting of exporter status to Inbound Tourism; waiver of E-visa fees for 2023-24 aimed at promoting inbound tourism and thereby increasing GDP.
Also, deeper marketing investments as part of the year-long G-20 summit initiatives to promote tourism – both inbound and domestic.
Further, a collaborative approach that co-opts us wherever there are new amendments and technical/interpretation matters.