The proposed fringe benefit tax on perks will have a negative impact by raising the cost of domestic and overseas travel by 10 per cent and indirectly hit the tourism sector, the Indian Association of Tour Operators said on Wednesday.
"Ultimately, it will be passed on to the customer and the packages will be expensive by up to 10 per cent," IATO president Subhas Goyal said.
"It is going to have a trickle down effect. If we send our man to accompany the customer on his tour, the entire expense of conveyance, lunch and everything will be taxed. Even telephone bill will be taxed," he said.
Describing the budget as "full of contradictions", he said that the tourism industry has the potential to emerge as the largest employment generator but nothing substantial has been announced