Budget 2021-22: Covid-hit tourism industry expects tax exemption, stimulus

With the coronavirus pandemic creating havoc in the travel and tourism industry, the industry is expecting stimulus measures like tax exemption, uniform GST rate on hotels and restaurants and other such relief measures to ease off the crisis.

New Delhi:Reeling under the economic losses due to the pandemic, the travel and tourism industry is banking upon the Union Budget 2021-22 for some relief. The industry expects stimulus measures in the upcoming budget like exemption of statutory permit fee for the lockdown period, uniform GST rate of 10 per cent on hotels and restaurants with input credits, among other relief measures.

Speaking to ETV Bharat, tourism expert and general secretary of Federation of Association in Indian Tourism and Hospitality, Subhash Goyal, said, "As of now, the GST rate on hotels is not fixed and we don't get the input credit on it. We want a fixed amount on it. Depending on the hotel category, earlier it was 18 per cent, then it had gone to 12 per cent. So, that is why we want a uniform GST rate of 10 per cent on hotels and restaurants with input credit."

"Tourism industry is the worst affected industry. Out of about 75 million people who are directly or indirectly employed in this industry - about 30 million have lost their jobs and about 10 million are on leave without pay. About 53,000 travel agents, 1.3 lakh tour operators and thousands of tourist transporters and tourist guides are struggling to survive," said Subhash Goyal.

The tourism expert said that like other countries, tourism industry did not receive any survival financial package from the government. "Therefore, we hope that this budget will give us some relief so that this industry can revive and millions of jobs are saved," the expert said.

Speaking about other expectations from the upcoming budget, Goyal said, "One year tax exemption to the tourism and hospitality industry should be there so that they are able to survive. All statutory payments like electricity, excise fees, transport permits should be exempted from the lockdown period."

The pre-budget recommendations by the Hotel Association of India (HAI) said that the government's support is crucial in speeding up the return to normalcy of the hospitality industry at a fast pace. This can be achieved through the formulation of pragmatic policies, rationalisation in tax rates and easy compliances and ease of doing business.

According to HAI, the Reserve Bank of India has recognised hotels as one of the most severely impacted sectors. Over 90 per cent of the hotel rooms in India fall in the category of economy, budget and mid-market segments and serve mostly Indian travellers.

The HAI estimated that about 40 per cent of all hotels in India are on the brink of permanent closure and the hospitality business is likely to take two to three years' time to bounce back to pre-covid-19 levels.