Indian tourism industry seeks immediate ‘survival measures’: FAITH


Industry body Federation of Associations in Indian Tourism and Hospitality ( FAITH) on Thursday sought from the government immediate “survival” measures to prevent mass bankruptcy and crores of unprecedented layoffs in the sector due to the COVID-19 pandemic. The crisis has jeopardised India’s 5 lakh crore tourism industry and employment of an estimated 3.8 crore jobs, FAITH said in a statement.

All cash inflows of the industry have completely frozen and are likely to stay that way for the financial year 2020-21, it added. To address the issue of cash outflows, FAITH has recommended “a complete deferment for twelve months of all statutory dues payable by tourism, travel and hospitality industry at the central government, states and municipal governments level without attracting any penal interest”.

These would include GST, advance tax payments, PF, ESI, customs duties, excise fees, fixed power and water charges and any fees for licenses and renewal at the state level, it added. The apex body also asked for “Tourism COVID 19 Relief fund to be set up by the RBI or the Ministry of Finance or Tourism to support salaries and establishment costs…The industry estimates the value of the fund to be minimum of Rs 50,000 crore which is almost equal to gross banking credit to the Indian tourism industry”. Stating that while the RBI has already provided for three months moratorium on EMIs of principle and interest payments on loans and recalculation of working capital from financial institutions, FAITH said that this needs to be without any accrued and accumulated interest during this period and it needs to be extended for twelve months. These are “immediate measures for survival that need to be addressed parallelly,” the statement said.

To achieve these measures, FAITH recommended setting up of ‘National Tourism Task Force’ of all relevant ministries of the central government along with ministry of tourism and chief secretaries of state governments and industry stakeholders. “This should be with legislative powers on the lines of GST council for state-wise standardised tourism response,” it added. Once the survival measures have been implemented then the measures for revival of Indian tourism needs to be put in immediately, FAITH said. The government needs to stimulate domestic tourism by giving 200 per cent weighted reduction of expenses to Indian corporates for undertaking their meeting, conferences and exhibitions in India, it added.

It also asked for LTA like income tax exemption of up to Rs 1.5 lakh to Indians for undertaking their holidays within the country, these exemptions to be availed against invoices issued by GST registered Indian tourism service providers, the statement said. “To stimulate tourism exports, Service Exports from India Scheme (SEIS) needs to be notified at 10 per cent value for all foreign exchange tourism companies and needs to be maintained at minimum same value for next 5 years and for off-season, it could go up to 15 per cent value,” it added. The apex industry body also asked for complete abolition of the tax collected at source (TCS) on travel agents as proposed in the finance bill 2020 as it puts the Indian travel fraternity at a huge disadvantage. FAITH urged the government to declare immediate survival measures for the sector and said globally the countries have already put in support measures for tourism industry through salary support and tax waivers.