New Delhi: Federation of Associations on Indian Tourism & Hospitality (FAITH), the collective body of 10 travel trade and trade and hospitality industry associations in the country, has urged the Ministry of Finance once again to set up a bridge/transition fund to help the tourism sector, which is in deep financial stress due to the COVID-19 pandemic.
Such a fund, FAITH says, can enable tourism travel and hospitality companies to draw down on a direct benefit transfer basis on an interest-free basis which they can utilise to pay salaries and meet operating costs till the vaccine is completely deployed.
This drawback in the tourism enterprises may be adjustable for over 5 years against their GST & income tax liabilities, proposed FAITH.
The federation says that according to the recent Q2 GDP data, the travel hospitality & trade has contracted over 15%.
Since vaccination being rolled out sounds hopeful and in insight, it is critical that the government comes forward to support businesses so that the businesses survive the transition period, said FAITH.
The drawback from this corpus will be setting a motion of a virtuous cycle enabling tourism travel & hospitality companies to keep their jobs alive and to be ready for the tourism demand as it begins to revive across international, leisure and corporate markets.
The government will lose just the time value of money but will benefit from tax-based growth emerging from this revival, FAITH suggests.
This industry contributes around 10% to the employable workforce of India.
A special RBI-appointed committee listed the tourism and hospitality sector as amongst the 26 worst-hit sectors. At such a time, the Federation of Associations in Indian Tourism and Hospitality urges the government again for specialised support.
It is seeking a reduction in GST hotels and transportation. It also urged to scrap off the recently introduced TCS on outbound tour packages.