Budgets announcements which are being expected include infrastructure status for the hospitality industry, focus on increasing foreign tourist arrivals through enhanced overseas marketing budgets and free tourist visas, rationalisation of GST with full setoffs, reduction in removal of TCS on outbound travel, among others
As the July budget approaches, the travel trade associations have reiterated their demands, urging the government to address long-standing challenges in the industry. The Travel Agents Association of India (TAAI) and the Federation of Associations in Indian Tourism and Hospitality (FAITH) have both submitted comprehensive requests to the government, highlighting critical areas needing attention to boost the sector’s growth.
TAAI expressed dissatisfaction with the interim budget presented by Finance Minister Nirmala Sitharaman on February 1, 2024. Despite repeated representations on various concerns, the travel industry was largely overlooked, said President, Jyoti Mayal. With a new government in place and the Union Budget 2024 imminent, TAAI has reiterated its requests to the Finance Minister, Tourism & Culture Minister Gajendra Singh Shekhawat, and Civil Aviation Minister Kinjarapu Rammohan Naidu.
Key Requests from TAAI:
1. Infrastructural Focus by the establishment of new airports through private participation. Rapid expansion in rail, road, and waterways (sea and river cruises). Development of high-growth areas like religious circuit, MICE, wellness and hidden gems such as Lakshadweep.
2. Simplifying Visa Requirements & encouraging visa-free entry for tourists visiting India can significantly enhance foreign tourist arrivals.
3. Reducing Aviation Turbine Fuel (ATF) Costs to pre-pandemic levels would improve air travel accessibility.
4. Rationalization of GST Rates and GST Credit: hoping for a more favourable GST structure that allows input tax credit for holiday businesses. This could lead to more affordable hotel stays, making accommodations accessible to tourists and encouraging investment in the sector.
5. Strategic Reduction in Income Tax: could catalyse growth in the country’s tourism industry.
6. Abolishment of TCS on Outbound Travel : Collection of TCS on outbound travel is a disincentivization for Indian Travel Agents, Tour Operators and travellers
7. Tax Exemption on Leave Travel Allowance (LTA) would encourage domestic travel and boost tourism within the country.
8. Removal of TDS on Automated Bookings would reduce administrative burdens for travel businesses.
9. Simplification of Licensing Requirements – Ease of Business
10. Industry Status for all stakeholders in Travel, Tourism & Hospitality
Similarly, FAITH’s Consulting CEO Aashish Gupta, emphasised the need for the government to recognise the tourism industry’s potential for employment, investment, and foreign creation generation. The association’s expectations from the upcoming budget include several strategic measures aimed at long-term growth.
“Budgets announcements which are being expected include infrastructure status for the hospitality industry to increase branded hotel supply at lower costs, focus on increasing foreign tourist arrivals through enhanced overseas marketing budgets and free tourist visas, rationalisation of GST to 12% for hotels and restaurants and 1.8 % to tour operators with full setoffs and reduction in removal of TCS on outbound travel to enhance the competitiveness of Indian travel agents , will reflect a long term intent to promote a tourism, travel and hospitality driven economy of India,” said Gupta.
The upcoming Budget holds significant expectations for India’s travel and tourism sector, which contributes 5.8% to the GDP and aims for a target of USD 1 trillion by 2047. Implementing these measures could significantly enhance the industry, benefiting both businesses and travellers.
