Budget 2015-16: Exempt service tax on package tours, says Cox & Kings

The tourism industry should be treated at par with exporters based on its foreign exchange earnings feels Anil Khandelwal, CFO, Cox & Kings Ltd. Tourism industry gets discriminated vis-a-vis exporters even though the tourism industry earns foreign exchange and 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 loose on account of price competitiveness and cannot match the prices of holiday packages, which are on offer by our competitive countries.Last month China announced the tourist tax refund scheme to boost inbound tourism and domestic consumption. According to this scheme, foreign tourists can receive a rebate of upto 11 percent on consumer goods purchased at designated departmental stores. With the government’s thrust on tourism as well as on ``Make In India’’ such schemes are ideal for India.With effect from July 2012, service tax has been levied for the services provided to Indian tourists visiting neighbouring countries like Nepal, Bhutan, Sri Lanka, Bangladesh, Maldives etc., which was not there prior to July 2012. This needs to be withdrawn as services are provided outside India.Rationalising tax on ATF will make air travel more affordable and will boost air traffic. Provide seed funding to establish 20-25 heliports at important tourist locations. The balance should  come from state governments and private operators.Lending to hotel projects should be under the ``infrastructure Lending List’’ due to which hotels will be able to access lower interest rate loans and longer tenor loans. This will lead to a revival of the Hotel industry, thereby increasing capacities for tourists.