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Updated on: Tuesday, September 28, 2021, 06:50 PM IST

Tourism, ease of doing business must be addressed by removing SEIS cap, restoring scrip rates, says industry body

FAITH has said that decrease in duty credit is going to be a massive hit on the cash flows of tour operators and hotels/ Representational image | Photo credit: Bottlein from Pixabay

FAITH has said that decrease in duty credit is going to be a massive hit on the cash flows of tour operators and hotels/ Representational image | Photo credit: Bottlein from Pixabay

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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), has flagged critical concerns in the just released SEIS notification.

It has made reference to the SEIS entitlement through duty credit slips through notification no: 29/2015-20, dated September 23, which will bring some relief to the cash-starved tourism enterprises after almost 18 months of severe COVID-19 pandemic.

However, it has raised two requests for urgent amendments in the notification.

The first is the mention in point 2, referring to para 3.08, to scrip rates for tourism and travel related services as specified in the annexure, Appendix 3x. The notified rates of duty credit have been brought down from 7 per cent and 5 per cent to 5 per cent and 3 per cent, respectively, to travel agencies, tour operator services (CPC - 7471), hotel and restaurants (CPC - 641-643), respectively.

FAITH has said that this decrease is going to be a massive hit on the cash flows of tour operators and hotels who made continued critical financial commitments in international markets in FY 2019-20 to enable the increase of international travellers to India beyond 17 million, which led to India's global market share of international arrivals beyond 1 per cent.

FAITH has requested that tourism and travel related services be exempted from this notified rate decrease as these services have been the worst affected by the pandemic. This has been highlighted in the Kamath RBI report and has been acknowledged multiple times across all representations of the Central and state governments.

FAITH has also said that as notified, under point 4, there has also been placed a cap of Rs 5 crores on SEIS entitlement for per eligible entity for FY 19-20.

It said that the Indian tourism, travel and hospitality industry is a mix of large, medium, small and micro tourism travel and hospitality industry. Each of these players have risen above and beyond their sizes to contribute to the growth of Indian tourism, valuable foreign exchange and thus crucial jobs.

Setting such a cap will be a major disincentive to large and medium players in their efforts to take 'Make in India' tourism enterprises global. FAITH has requested to remove this arbitrary cap of rs 5 crore on SEIS entitlements for the tourism, travel and hospitality industry.

Addressal of these concerns will bring in ease of doing business and remove any policy uncertainty in the Indian tourism travel and hospitality industry.

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Published on: Tuesday, September 28, 2021, 06:46 PM IST
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