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FM once again disappoints Travel Trade: TAAI

The Hon’able Finance Minister Mrs. Nirmala Sitharaman, today in her Budget speech once again ignored the Travel Trade in India.

Travel Agents Association of India(TAAI), which had sent pre-budget requests to the FM, is totally shocked at the zero response received from the Government of India.

Despite being one of the key drivers of economic growth and employment, the sector has been notably underfunded and overlooked in the latest budget, stated TAAI.

The FM in her speech highlighted infrastructure development for only two to three religious locations which shall be taken up for development and promotion by the government. These religious circuits are totally raw and need a huge push. Rather than upgrading the current locations and enhancing last mile connectivity to popular locations the Govt. is trying to push locations where connectivity is a huge challenge and there is lack of interest in the Domestic as well as the inbound tourism market.

Our requests for reduction in Aviation Turbine Fuel (ATF) was not considered which would reduce the airfares and increase the growth in the number of travellers.
Requests for rationalisation of GST Rates for inbound, outbound as well as domestic travel doesn’t seem to be of importance to the Government. TAAI has made multiple demands to permit GST input credit for interstate hotel rates which would thereby allow the hotels as well as passengers to avail of input credits in their businesses.

The main concern raised by TAAI was on the abolishment of TCS on outbound travel which is hindering the ease of doing business for Indian Travel Agents / Tour Operators and increasing the competition with global players from overseas not levying GST or TCS to the passengers. Inbound and Outbound Tourism go hand in hand and to increase inbound, outbound tourism too must increase. TCS puts a spoke in the outbound tourism traffic as the travellers funds are blocked.

Further in our request to promote e-commerce for travel agents and tour operators, simplified and reduced TDS rates have also been un-noticed by the FM while presenting the Finance Budget for 2024-25.

We have been reiterating to the Government of India to place the Travel and Tourism Trade, specifically the travel agents and tour operators in the concurrent list and provide rebates to the trade as a result grant industry status.

Missed Opportunities in Promoting Domestic Tourism: The budget falls short in launching robust campaigns to boost domestic tourism, which has become increasingly crucial in the current global context. Promoting local travel can drive immediate economic benefits and foster a culture of exploring India’s diverse attractions.

Simpler Tax Regime for Inbound Ships: We had requested for simpler and reduced taxes for foreign shipping companies operating and visiting India so as to boost Inbound Tourism through cruises. Cruise Tourism in one of the big enhancers of Inbound Tourism and if taxes thereto are reduced exponential growth is inevitable.

In conclusion, the financial budget presented by the Finance Minister has significant gaps that could hinder the growth and recovery of the travel and tourism sector. Addressing these issues with a more comprehensive and supportive approach is crucial for unlocking the full potential of India’s tourism industry and ensuring its sustainable development.

Vaidehi Kaushik

Vaidehi Kaushik is a writer and author with a degree in English, currently pursuing mass communication and journalism. She has diverse experience as a ghostwriter, content writer, and copywriter. Passionate about reading, writing, traveling, and cooking, Vaidehi brings a rich blend of creativity and expertise to her work.

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