Budget Blues: India’s Travel Trade Sector Left Disheartened
The Hon'ble Finance Minister, Nirmala Sitharaman, in her speech while presenting the Budget, very clearly left out the Indian Travel Trade industry, disappointing the industry stakeholders once again. TAAI was quite hopeful in its pre-budget appeal for some support from the government. Still, it turned out to be unexpectedly silent and disappointing for the association.
The association has pointed out that the sector, one of the major economic growth and employment drivers, needs to be funded and addressed in the recent Budget. The Finance Minister mentioned infrastructure development for a few religious places; TAAI said these places need much more investment and connectivity. “Instead of developing already established destinations with known carrying capacity and building last-mile connectivity, the government is bent upon developing isolated sites with low tourist demand from within the country as well as from the perspective of inbound tourism,” it said.
It retained the TDS from 1 percent to 0.1 percent for e-commerce platforms. It brought a more hassle-free tax regime for foreign shipping companies working in the domestic market. However, most of TAAI’s critical requests were overlooked. The call was dismissed for lowering Aviation Turbine Fuel or ATF to reduce airfares and increase travel growth. No attention was paid to rationalising GST rates for inbound, outbound, and domestic travel or permitting GST input credit on interstate hotel rates, which will benefit hotels and travellers.
TAAI also pointed to the continuous imposition of TCS on outbound travel, complications in business for Indian travel agents and tour operators, and making them less competitive against global counterparts who do not pay such taxes. They insisted that there was a need to accord the travel and tourism industry, particularly the business of travel agents and tour operators, a place in the concurrent list and industry status. Another missed opportunity was the need for solid campaigns on domestic tourism in the Budget.
