The central government has been urged for help by the travel and tourist sector in order to strengthen the structural change required to create a more robust, long-lasting, and resilient tourism sector in the upcoming budget.
The domestic leisure travel market in India has rebounded far above pre-pandemic levels, according to Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip, but long-haul foreign travel is still lagging.
The sector requires support from the government at this pivotal time to maintain its position as one of the main employers in the nation. He said, “With India’s focus on becoming a digital economy, the disparity between offline and online bookings should be done away with to motivate all travellers to embrace digital India at the grass-root level. Currently, the customer pays a 5 per cent GST charge when booking a non-AC bus through an online platform. This charge is zero for an offline booking. The disparity is similar in the case of an online booking of unregistered hotels and homestay.”
Mahesh Iyer, Executive Director and CEO of Thomas Cook (NS:THOM) in India stated that the travel and tourism industry significantly contributes to India’s GDP. The projected National Tourism Policy aims to increase this contribution to $150 billion in 2024 and $1 trillion by 2047.
Along with foreign exchange revenues, our sector fosters skill development and job creation in the travel, tourism, and related sectors. Government assistance would be crucial in hastening the recovery after the pandemic and in maximising the advantages of this potent sector through the rationalisation of taxation and budgetary expenditure on infrastructure.
“Our key expectations for the upcoming Union Budget would include: lowering of TCS (NS:TCS) for outbound travel and LRS remittances; LTA expansion to once a year against twice in 4 years to boost domestic tourism; reduction of TDS rate as this could adversely impact corporate travel spends; exemption of travel agents from section 53 of GST as it forms a major compliance and working capital challenge for travel agents (there is no ultimate loss of revenue to the government, given that airlines already discharge tax on their sale),” he added.