Suman Billa, Joint Secretary, Ministry of Tourism shared that the ministry has been seeking lower rate of tax in the MICE and convention segment and with the GST coming in, he expects the existing rates to come down substantially. Speaking at ICPB meet, held a few days ago, in the capital, he talked about the need for defining a clear road map and a stronger marketing outreach to remain relevant in a globally competitive marketplace. Excerpts of his speech:
We have been, for a long time, taking it up with the government to allow conference visa under the electronic visa system. That has finally been agreed to by the government. The notification is yet to come, but they have agreed to in-principle, and that is a big boost for us.
We need to be prepared for the Goods and Service tax, which will begin rather sooner than later. When the GST comes in, it is important for all of us, and we the ministry is trying very hard, but the industry also needs to put its strength behind, making sure that the convention and MICE segment of business gets treated favourably. So, one of the things that we have been suggesting, and pushing with the finance ministry is that MICE needs to be treated in a lower bracket of tax. Assuming that 18% is the standard rate for GST, we are seeking that the rate should be around 9% or so. But in any case, if you calculate the rate, 23-24% which prevails now, even in the worst-case scenario, we should come down to about 18% or so. But I think that it is not enough. The argument that we are making is that to be truly globally competitive, India’s tax rates need to be at par with the rest of the world.
So, we have been saying that 5-7% is the acceptable rate across the world, and anything that goes into double-digits will make the industry fundamentally more unviable.
On budgetary proposal
Several people when they have to organise conferences and events, they go abroad. The argument that we are taking with them is that every conference that happens in India, and does not go abroad, is actually so much foreign exchange saved and so much more that comes into the domestic economy. So, we have been saying that there has to be an exemption for, or at least half the tax of income tax liability which will be on conducting these events abroad. So, that is to say that if there are tax incentives for these events which were to be held in India, again which were to go abroad, it is likely that it will be become a reasonably good kicker.
It is not an easy thing. We have been pushing this for two years. But, let us see how it goes. Along with GST, if we are able to do that, I think it will be a big step.
The understanding is that if there is a company and it has a conference to organise, and if you organise that conference in India and if you are able to show it as a part of your expenditure, and get some amount of tax rebate in it, it incentivises people to do that in India, rather than taking it elsewhere.
The way forward for ICPB
We are doing a study and the terms of reference are done on where ICPB needs to go and what the size of this business is, because, typically, when we think incrementally, we are always looking at we are at position A today, and how do we get to position B – which is how we plan. I think we need to look at what is the size of opportunity that there is in this country for this segment, and then see how we need to recast ourselves. We would get a world-class consultant to map out a way forward and better understand what we need to be doing to encash this opportunity. So, that process is underway.
On Global Travel Mart
The Global Travel Mart was to happen in February, but I think we might be pushing the dates a little ahead. We will be hosting some 400-500 buyers, who can bring incremental business to the country. That is the piece where we also need to look at as ICPB.
On the need for stronger media outreach
This year we have already done some advertisements in media properties, which are generic to the MICE industry. We will continue that forward. I have also told them that we could look at creating a new series of print creatives for MICE. We have already made a film on the MICE segment – which is projecting India as a MICE destination. It is being made by BBC. So, we will have good audio-visuals to showcase our business.