Indian Tourism Industry on the Brink of Collapse

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Kolkata, April 23, 2020: Federation of Associations in Indian Tourism & Hospitality, the policy
federation of all the national associations representing the complete tourism, travel and hospitality
industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) over the past six
weeks has been appealing to the Prime Minister, Finance Minister, Tourism Minister, Commerce
Minister, Aviation Minister, Niti Aayog and the Parliamentary Committee on Tourism and Reserve
Bank of India. Indian Tourism industry, in 2018-19 handled business ofover 10.5 million foreign
tourists, more than 5million visiting NRIs, 1.8 billion domestic tourist visits & over 26 million
outbound travellers. The industry is facing its biggest economic challenge with the larger and
combined effect of 9/11 and the slowdown of 2009 and estimated bigger effect than the Economic
Depression and World War II.
All the cash inflows of the industry have completely frozen and are likely to stay that way for the
financial year 2020-21. To address the issues of cash outflows, FAITH has recommended immediate
measures for survival that need to be addressedparallelly.
 A complete deferment for twelve months of all statutory dues payable by tourism, travel &
hospitality industry at the Central Government level, state and municipal government level
without attracting any penal interest. These would include GST, Advance Tax payments, PF,
ESI, customs duties, excise fees, fixed power & water charges and any fees for licensesand
renewal at the state level.
 A support fund ‘Tourism COVID 19 Relief fund’ to be set up by RBI or Ministry of Finance or
Tourism to support salaries and establishment costs. It should be either in the form of an
interest free loan to Tourism companies for repayment of the principle over 10 years. The
industry estimates the value of the fund to be minimum of Rs.50,000 crores which is almost
equal to gross banking credit to the Indian Tourism industry.
 RBI has already provided for three months moratorium on EMIs of principle and interest
payments on loans and recalculation of working capital from Financial Institutions. This
needs to be without any accrued and accumulated interest during this period and it needs to
be extended for twelve months.

To achieve the above FAITH recommends setting up National Tourism Task Force of all relevant
ministries of the Central Government along with ministry of tourism and chief secretaries of State

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governments and industry stakeholders. This should be with legislative powers on the lines of GST
council for state-wise standardized tourism response.
FAITH has also recommended that once the survival measures have been implemented then the
measures for revival of Indian Tourism needs to be put in immediately. The Govt needs to stimulate
domestic tourism by giving 200% weighted reduction of expenses to Indian corporates for
undertaking their meeting, conferences, and exhibitions in India. LTA like income tax exemption of
upto Rs.1.5 lakhs to Indians for undertaking their holidays with the country, these exemptions to be
availed against invoices issued by GST registered Indian Tourism service providers.
To stimulate Tourism exports, SEIS needs to be notified at 10% value for all foreign exchange tourism
companies and needs to be maintained at minimum same value for next 5 years and for off-season,
it could go upto 15% value. To ensure the revival of Indian travel agent, all refunds, advances and
cancellation amounts to be immediately paid back by all airlines, railways and state wildlife parks.

The TCS on travel agent proposed in the finance bill 2020 to be implemented on October 1, should
be completely abolished as it puts the Indian travel fraternity at a huge disadvantage of upto 15% v/s
their global competitors. Additionally, the service fee for credit card charges needs to below 1% and
all corporate travel agent credit cards to be honored. To additionally ensure the survival of Indian
tourist transporters, all inter-state levy need to be reduced and standardized. The year 2020-21 can
be declared as a GST tax holiday for Indian tourism without stopping the flow of Input tax credits
since there will be minimal GST collections from highly reduced travel within India.
FAITH urges the Government to declare immediate survival measures to prevent mass bankruptcy
and crores of unprecedented layoffs. World over, countries have already put in support measures
for Tourism industry through salary support and tax waiver such as USA, UK, Singapore, Thailand,
Australia, Indonesia and many others.

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