Published on : Monday, May 10, 2021
FAITH, 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) & cause partner AIRDA has made suggestions to Finance Ministry, RBI & Tourism Ministry for urgently taking up measures targeted at Tourism Jobs & Businesses Protection
It has been repeatedly reaffirmed through all Government data whether that of GST, RBI or of income tax that tourism, travel & hospitality continues to be the worst hit sector during the 13 months period since the time pandemic has struck and is also likely stay that way for much of the foreseeable period. To address that on an immediate basis, the three measures proposed are:
· Waiver or compensation for Fixed Statutory Liabilities
· Direct Benefit Transfer of Basic Pay
· Credit of SEIS dues for 2019-20
Waiver or compensation for Fixed Statutory & Compliance Liabilities: There has been literally no tourism business due to full or partial shutdown of all other segments of tourism – inbound , outbound , corporate and also group tourism business and now domestic travel . Without any business, it is practically impossible for tourism, travel & hospitality entities to generate cash flows. This situation is dramatically inverse to that of pre-pandemic which saw almost 17.8mn + international tourist arrivals, almost 26.9 mn + outbound and almost 2.3 billion domestic tourism visits in 2019-20.
Despite no revenues, there are statutory liabilities & compliance liabilities at both state and central Government level & other regulatory bodies which still need to be met. These include various forms of duties, taxes, cess or license fees including electricity & water, property taxes, excise duties, transport taxes, parking cess, insurance premiums provident fund, ESI contribution on hotels, travel agents, tour operators, restaurants tourist transporters or any other form of tourism travel & hospitality services.
With no revenues and businesses continuing under shutdown for measures beyond their control, it is principally unfair for these businesses to continue paying fixed costs of statutory liabilities & compliances for them.
FAITH has requested the Government to urgently urge all State Governments and the respective Central Government ministries to waive off these fixed levies & compliances till the period of the pandemic.
Till the time that is fully achieved, they have suggested the Government to set up a corpus with Ministry of Tourism to meet these monthly liabilities of tourism travel & hospitality companies to discharge them on their behalf.
With no revenues & cash inflows to discharge out cash flows emerging from statutory & compliance liabilities, this gesture will prevent Indian tourism, travel & hospitality businesses from declaring bankruptcies and will protect their vital jobs
Direct Benefit Transfer of Basic Pay : Pre- pandemic, it was roughly estimated that between 10%- 12% of India’s direct and indirect employment came from tourism, travel & hospitality services. This included both skilled and unskilled jobs across the length and breadth of our country.
With no tourism business, a lot of these employees are temporarily out of jobs or on minimum wages. Their service skills have been cultivated with a lot of diligence and passion over years which makes Incredible India a reality that it is.
Faith has requested that an amount equivalent to their pre pandemic basic salaries be sent each month to such tourism, travel & hospitality employees in a direct benefit transfer against their PAN Card. This will help support livelihoods of crores of people and their families till the duration of the pandemic. It will also enable them to be job and service ready for when it is time to restart Indian tourism.
Credit of SEIS dues for 2019-20: Globally Indian tourism has to compete aggressively with other countries for market share. With years of such effort India’s market share crossed 1% in international travel arrivals, pre – pandemic.
These marketing, sales & business development efforts & expenditure are made on the ground in global markets by our tour operators & hoteliers around the year which resulted in India earning $ 30 bn + vital forex for the country.
SEIS as part of the Foreign Trade Policy has been a way to compensate for such marketing expenditure. SEIS scrips dues against tourism foreign exchange earned for 2019-20 is still outstanding which is creating significant distress on their individual balance sheets.FAITH has requested that these SEIS dues be credited immediately to enable such tourism, travel & hospitality companies to meet their expenses and to take care of their employees.