Umbrella association FAITH has asked for Prime Minister – Holiday in India Export Support (PM – HINES) for the upcoming foreign trade policy to fast track tourism, travel and hospitality exports from India.
PM – HINES is a combination of two existing similar support mechanisms of the government of encouraging duty-free exports and PLI scheme. On similar concept, to increase tourism, travel and hospitality exports from India we are basing PM – HINES on two key market principles : drawback of all domestic duties, levies and taxes which have become implicitly built into the price of tourism in India and Market linked Incentive based on increasing exports.
Thus, the proposed formula for PM- HINES is domestic duty drawback of 5% of gross forex earnings from tourism travel & hospitality services as base drawback for all tourism exports. The Association has also proposed market linked incentives including: 1 % additional drawback for forex earnings if gross forex earnings are < US$ 50 million in the financial year; 2 % additional drawback for gross forex earnings if gross forex earnings are > US$ 50 million upto US $ 100 million in the financial year; 3% additional drawback for gross forex earnings, if gross forex earnings are > US$ 100 million upto US $ 200 million in the financial year; 4% additional drawback for gross forex earnings, if gross forex earnings are > US$ 200 million upto US $ 400 million in the financial year and 5% additional drawback for gross forex earnings, if gross forex earnings are > US$ 400 million + in the financial year.
Thus, any exporter of tourism travel & hospitality services will get the following duty incentive under PM – HINES as follows
• 6% of their gross forex earnings if gross forex earnings are upto $ 50 m in the financial year
• 7% of their gross forex earnings if gross forex earnings are above $ 50 million upto $ 100 million in the financial year
• 8% of their gross forex earnings, if gross forex earnings are above $ 100 million upto $ 200 million in the financial year
• 9% of their gross forex earnings, if gross forex earnings are above $ 200 million upto $ 400 million in the financial year
• 10% of their gross forex earnings, if gross forex earnings are above $ 400 million in the financial year
According to FAITH, this will immediately start make our tourism travel and hospitality exports super competitive globally as tourism enterprises will use the drawback incentive to market internationally, to advertise, to build global partnerships and to reduce overall prices which will lead to much increase’s forex earnings.
Moreover, this will also encourage more and more tourism travel and hospitality companies to invest heavily in people, product, infrastructure, which will lead to increased jobs pan India GDP growth and tax collections.
