FAITH, under the guidance of its chairman, Nakul Anand, has written to the Minister for Tourism, seeking support for a series of measures, that would help to kick start Indian tourism and save jobs and prevent bankruptcies. Speaking on behalf of the 10 founder member associations (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) and their cause partner – AIRDA, Anand stated that the ten associations had met and had extensive discussion to come to specific conclusions that could be presented to the government as an action plan.
Three aspects of tourism – Enabling Mechanism, Revival of Tourism Demand and Protection of Tourism Suppliers – were identified as the touchstones of their recommendations. To ensure that the correct enabling mechanism is put in place FAITH has proposedthe setting up of Dual Task Force as Tourism encompasses multiple ministries and takes place in and within states. It thus requires a coordinated approach across all the ministries at the central government level and between centre and the states. An inter- ministerial task force at the central government level and an inter- state task force oftourism ministers have been suggested. These two task forces need to be empowered and agile to fast trackdecision making as tourism now, as tourism will be the last sector to revive.
On the subject of Revival of Demand, FAITH has said that one of the fastest ways to protect our tourism businesses and to save jobs is to activateimmediately multiple strategies. Some of the measures include Targeted Marketing Communication, Uniformity in Regulations, especially with regard to the containment and quarantine rules across states, Progressive E- Visa Strategy and the need toincentivise Domestic Mice & tourism. It has suggested holding of the India International Tourism Mart for international tour operators to establishconfidence and showcase the Incredible Indian tourism products in thefirst or the last week of November. FAITH has also recommended fresh meeting norms for MICE, as the meetings segment must begin its revivalprocess and has recommended revising upwards the meeting norms by allowing300 indoors and 500 in open areas. FAITH has cited two fine examples of safe gatherings like the proudunfurling of our national flag at Red Fort on the occasion of our 74th Independence Day andthe inauguration of the holy temple site at Ayodhyaby none other than the honorable PM. These can be showcased astemplates for role model gatherings.
FAITH has sought GST rationalization for hotelsabove ₹7500 be brought down to 12% from 18% which will stimulate travel. On a weightedaverage basis, India still one has the highest GST in tourism around the world which in majorityof the countries is less than 10%. It is critical for IGST to be enabled for hospitality industry. This will enhance inter-state Indian meetings industry movement with companies getting interstate GST credit while using hotels for meetings in other states in which they are not registered. This will also complete the end to end tourism value chain from hotels to tour operators and avoid double GST levies.
GST setoff option for restaurants is important to revive restaurants by providing a GST option of 12% with full setoff on input costs be made available for restaurants and restaurant GST be delinked from hotel tariffs. Currently the rate slabs are at 5% without setoffs and 18% with setoffs for restaurants in hotels with room tariffs above ₹7500.
Among its other suggestions, the national body has sought LTC recognition to be given to Tour operators and travel agents recognized by the tourism ministry, to be notified as LTC operators. This will automatically allow travel within the country foradventure, religious, heritage, spirituality or for education purposes and others across thecountry.
FAITH has asked for extension of moratorium & penal relaxation to financially protect the tourism, travel and hospitality companies, till the resolution plan is set in motion by the RBI. FAITH Associations have proposed extension of the moratorium on tourism companies.Banks should also be requested to waive off foreclosure penalties mentioned in thehypothecation agreements to enable tourist transporters to undertake vehicle sales togenerate emergency cash flows.
It has recommended an automatic rollover of permits , licenses, certifications & classifications: It isrequested that automatic extension be enabled for all tourism service providers for touristtransport permits, tour operators permits, liquor licenses and other extensions and hospitalityclassification at the central, state and local levels.
The Indian travel agents are key enablers of the traveldistribution. FAITH Associations have requested for an even more healthy partnership approachbetween Indian travel agents, IATA & Air India. Travel agents and consumers need toinsure against airline payment defaults of their advances and cancellations and mechanismsneed to be put in place. The TCS which was proposed to be levied on outboundtravel from 1st April was deferred by 6 months but needs to be completely abolished as levying the same will make Indian travel agents uncompetitive againsttheir international peers.
FAITH Associations have requested that SEIS credit to be madeavailable to tourism industry against their foreign exchange earnings. At this time of crisis andbusiness re-building it would greatly help if the rate is pegged at 10% for both tour operatorsand hotels category and is made applicable also on gross foreign exchange earnings. Toprovide cash flow support and policy continuity it may be kindly made available for FY 2019-20 and also for the policy period of the FTP 2020-25 with a provision of an additional 500 basispoints increase during lean tourism period to stimulate enhanced foreign exchange earnings.
A most comprehensive document that encompasses the needs of the diverse segments that make up the travel and tourism sectors, FAITH has put together an important set of suggestions for the government to take up. As the apex body that brings together the ten leading industry arms, this is a first step that puts together concrete steps in reviving the businesses affections millions of lives in this sector.