Travel agent associations disappointed with Budget 2023; Here's why

While Finance Minister Nirmala Sitharaman seemed very positive on promoting the tourism sector, not everyone is pleased. Federation of Associations in Indian Tourism & Hospitality (FAITH) has expressed the tourism industry’s concern that the Budget statement could have covered more direct support measures for the industry.

“While we are thankful that the FM has touched upon developing tourism on a mission mode along with destination development, yet the Indian tourism, travel & hospitality industry was keenly looking forward to getting the vital infrastructure status, to be treated at par with merchandise exports, to have received enhanced support for global marketing, and more financial support mechanisms for tourism MSMEs,” says Nakul Anand, Chairman, FAITH.  

Added Jyoti Mayal, President of Travel Agents Association of India (TAAI): “It is a populist Budget for individuals. Nothing for travel agents and tour operators.” She says travel agents contribute to over 10 per cent of the GDP. “Nothing on our request on ease of doing business be it on TCS abolishment or ITC for tour operators on interstate GST credit which is one of the main concerns requiring urgent redressal from the FM!” Domestic tour operators are required to collect tax at source (TCS) on sale of overseas tour packages.

“The announcements are certainly advantageous for overall tourism growth and tourism infrastructure development but the growth of travel agents and tour operator organsiations remain unchanged this year too,” she said.

“Some of our members who do outbound tourism business will have to close their business as Tax Collection at Source (TCS) has been proposed to be increased from 5 per cent to 20 per cent. This needs to be rolled back immediately,” says Rajiv Mehra, President, Indian Association of Tour Operators (IATO). “None of our demands like, rationalisation of GST on tourism industry, exemption of GST on foreign exchange earnings and refund of tax on shopping under Tax Refund to Tourist (TRT) Scheme on shopping etc. for which there is already a provision in GST Act, have been considered,” said Mehra. He says the government should consider these demands sympathetically as they are important for revival of tourism post Covid-19.

As per FAITH, since the Budget, was coming on the back of a recovery from the pandemic, this was an opportunity to strengthen the tourism, travel and hospitality industry of India to reclaim its global inbound tourism share and to add value to domestic tourism which would have boosted employment pan India.

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