The Federation of Associations in Indian Tourism & Hospitality (FAITH), has written a letter to PM Narendra Modi seeking his intervention for the tourism industry’s immediate survival. While fully appreciating the speed with which the government has worked to contain the spread of COVID-19 in India while also evacuating stranded Indians from around the world, Nakul Anand, chairman, FAITH, in the letter has asked for government support for the industry. “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,” said the letter.
FAITH has requested for a twelve months moratorium on EMIs of principal and interest payments on loans and working capital from Financial Institutions (both banking & non-banking). Additionally, it has requested for doubling of working capital limits and on interest free and collateral free terms. to prevent all tourism businesses from going bankrupt.
Additionally to prevent insolvency, FAITH has requested 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 excise fees, levies, taxes, power and water charges, bank guarantees and security deposits and deferment of all renewals, across the tourism, travel, hospitality and aviation industry.
FAITH has also requested the government to set up a support fund for twelve months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees. The letter has requested that the government should not introduce TCS (tax collected at source) on travel proposed in Finance Bill 2020 to be levied from April 1, 2020 as it will displace business from India to overseas, which will lead to shutting down businesses of most Indian tourism companies.
FAITH has requested a complete GST Tax Holiday for the tourism, travel and hospitality industry for a period of twelve months. With almost nil revenues there is hardly going to be any GST collection. But a gesture of this nature will make a very strong statement and will promote both domestic and inbound travel, it said.
A 200% weighted exemption for twelve months on expenses to Indian corporates to hold exhibitions, conferences and incentive trips in India has also been suggested.
The letter further read, “To promote foreign exchange earnings for when the recovery starts happening, we request for restoration of 10% duty credit of SEIS scrips. Additionally, to kick start the working capital the previous year’s foreign exchange earnings can be taken as a reference point for credit.”
Finally FAITH has requested the government to set 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.