This is what the travel sector expects from Budget 2016

It goes without saying that 2015 has been a pretty good year for the tourism industry. Infact, since the BJP government has come to power in 2015, the tourism sector has risen to prominence with Prime Minister Narendra Modi himself praising the employment and the revenues generated as a result of this industry.

Tourism on the other hand has been a key contributor to the Indian economy as well, and boasts of immense possibilities of growth. Though the government’s initiatives to ensure that domestic and international connectivity and accessibility through the e-visa scheme has borne positive results, there still exists a huge gap as far as travel facilities, infrastructure, high taxes, tourist safety among others.

Thus, it’s no surprise that the travel industry has a lot of expectations from this Union Budget 2016.

According to Anil Khandelwal, CFO, Cox and Kings, it’s time that the tourism industry be treated at par with exporters based on its foreign exchange earnings.

“The industry earns foreign exchange and the retention of foreign exchange is much higher than any other export oriented industry. Like exporters, based on foreign exchange earnings, tour operators should also get exemption of service tax on package tours as the payment is received in foreign exchange. With the service tax added at present, India packages lose on account of price competitiveness and cannot match the prices on holiday packages, which are on offer by our competitive countries like China, Thailand, Malaysia, Sri Lanka, Singapore Hong Kong etc,” he adds.

Manmeet Ahluwalia, Marketing Head for Expedia India further adds that he expects tourism industry to be a key agenda for the government in this Union Budget, similar to its share of importance displayed by the government in the past two years.

On the other hand, Sharat Dhall, President of Yatra feels that leniency in tax structure is the need of the hour which will inturn help boost inbound tourism.

It is because of travel and tourism being a very highly taxed industry in the country that India becomes an expensive destination, which is not good news for anyone.

Echoing his demands, Khandelwal adds that tax is an important issue that needs to be dealt with in this year’s budget.

“Indian tour operators have to pay double taxes for the arrangement for outbound tours, firstly in India and secondly outside India. To avoid the double taxation on the outbound tours, it is recommended that the service portion, which is rendered in India, should be taxed and rest should be out of the service tax,” he said.

He is also of the belief that cruise tourism is one of the budding travel segments in the country that need to be strengthened.

“In order to strengthen it further, robust cruise tourism policy framework is essential as India is entering into a market already dominated by strong cruise tourism players and markets,” he concluded.

Image credits: Indiatimes