Federation of Associations in Indian Tourism & Hospitality (FAITH), nodal agency for tourism has reached out Prime Minister, Narendra Modi’s office to seek help on the crisis posed by the novel Coronavirus pandemic on the sector.
In a letter to PM, Nakul Anand, Executive Director – ITC Hotels & Chairman, Federation of Associations in Indian Tourism & Hospitality has sought his help for a number of issues including bankruptcies, mass unemployment and relaxation of certain norms pertaining to the sector’s business.
With tourism and hospitality industry facing the worst-ever crisis, Anand in the letter wrote, “With declining revenues almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your support now more than ever. Sir, this is a time of an unprecedented emergency and our request to you is for an equally befitting response for the tourism industry’s immediate survival.”
He also highlighted that, “around 70% out of a total estimated workforce of 5.5 crores (direct and indirect) could get unemployed (~ 3.8 crores). This effect of job losses and layoffs has already begun throughout the country. A large % of total tourism business activity of India, which is estimated at $ 28 billion+ in forex and upwards of ₹ 2 lakh crores in domestic tourism activity will be at economic risk through the year. Thus, in excess of ₹ 5 lakh crores of direct tourism industry and almost double that of total economic activity is at risk.”
Anand on behalf of the associations listed out a number of exemptions, which in a way will help the hospitality and tourism industry to survive. Here’s a close look at it:
• The association has requested for a twelve months moratorium on EMIs of principle and interest payments on loans and working capital from Financial Institutions (both banking & non-banking). Additionally, a request for doubling of working capital limits and on interest free and collateral free terms was also raised to prevent all their tourism businesses from going bankrupt.
• In order to prevent insolvency, FAITH has appealed for a deferment for twelve months of all statutory dues whether GST, Advance Tax payments, PF, ESIC, customs duties at the Central Government level or at any state government level. The deferment will include the excise fees, levies, taxes, power and water charges, bank guarantees and security deposits and all renewals, across the tourism, travel, hospitality and aviation industry.
• Another request raised was of setting up a support fund for twelve months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees.
• The tourism and hospitality body has asked the Indian government to not to introduce TCS (tax collected at source) on travel which has been proposed in Finance Bill 2020 to be levied from 1st April 2020. The reason quoted by the body is that the introduction of bill will lead to displacement of business from India to overseas, which will further lead to shutting down of businesses of most Indian tourism companies.
• A deferment of increase in any insurance premium for a period of 12 months must be implemented for circumstances such as for example for standard fire and special perils rate for fire, loss or profits.
• For the revival of Indian tourism, the association has requested for complete GST exemption for the Tourism, Travel & Hospitality Industry for a period of twelve months. With almost nil revenues there is hardly going to be any GST collection. But the deferment of GST will help the association promote both domestic and inbound travel.
• In order to revitalize the industry, the association requested a 200% weighted exemption for twelve months on expenses to Indian corporates to hold exhibitions, conferences and incentive trips in India.
• To promote foreign exchange earnings for when the recovery starts happening, a request for restoration of 10% duty credit of SEIS scrips was raised. “Additionally, to kick start the working capital the previous year’s foreign exchange earnings can be taken as a reference point for credit,” stated the letter.
• A request was raised for setting up a 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 to meet regularly to fast track all tourism investment approvals.
