Union Budget 2015: FM promises visa on arrival to 150 countries to up tourism

Moreover, with individual tax payer seeing tax benefit up to income of Rs 4.44 lakh, would put more disposal income in their hands and thus could help the hotel and tourism industryIndustry expectations from Union Budget 2014-15

•    To dilute the eligibility criteria for hotels to qualify for infrastructure status. Currently, hotel projects above Rs 200 crore and convention centre projects above Rs 300 crore qualify for infrastructure status. The  bar is expected to be lowered to Rs 100 crore for hotel projects and to Rs 200 crore for convention centre projects to reduce high cost of debt.•    The Hotel Federation expects hotels to be allowed a higher weighted deduction of 150% of the capital expenditure incurred in setting up new projects.•    Commissions on hotel bookings should be exempt from Tax Deducted at Source (TDS)•    Not linking taxes to star category of the hotel.•    Rationalisation of taxation, removal of double taxation on rooms (LT & ST) and food (VAT & ST)•    Ease of doing business through single window clearance, •    Inclusive and sustainable tourism sops•    The e-visa introduced by the present government, should be implemented on the ports of entry all over the countries and also, include other countries which are not being included as this will generate additional inflow of foreign tourists.State of Industry

Due to the overall economic slowdown, the year 2014 was not a great one for the hospitality industry. Currently, the industry is bogged down by several bureaucratic obstacles, financial burdens from both the central and state governments that include Service tax by Central government and Luxury tax charged by the State government. Plus Value Added Tax (VAT) - on Food and Beverage, Excise Duty - on Beverages and Octroi Duty - on items imported into the State, among others. The growth is particularly stagnating, including that for the tourism industry.

However, given the long-term potential of the Indian market, the industry, particularly the hotel sector is on an expansion spree. Highlights from Budget 2014•    Services provided by Indian tour operators to foreign tourists in relation to a tour wholly conducted outside India was taken out of the tax net and Cenvat credit for services of rent-a-cab and tour operators allowed to promote tourism.•   The announcement of E-Visas at nine airports helped in expanding the footfall of foreign tourists beyond the key metros while facilitating an easy visa procuring process.•    The government’s pro-tourism focus also saw manifestation via key initiatives announced in the Budget.Safety of women, a mission critical element given prime importance and much needed delivery via Budget initiatives like the Crisis Management Center for women.•    The development of new airports in Tier-I and II cities through Public-Private-Partnership (PPP) mode.•    Personal Income-tax exemption limit raised by Rs 50,000/- that is, from Rs 2 lakh to Rs 2.5 lakh in the case of individual taxpayers, below the age of 60 years. Exemption limit raised from Rs 2.5 lakh to Rs 3 lakh in the case of senior citizens to encourage tourism•    The fact that Service Tax was waived off for foreigners travelling to other countries through Indian operators makes tourism more competitive.