The tourism industry is looking forward at direct tax incentives from the forthcoming Budget.
The recommendations made by the industry include consideration of foreign exchange earned through tourism to be treated as deemed export, introduction of investment allowance for the tourism sector and creation of foreign currency fluctuation reserve.
The travel and tourism industry has also requested the exemption of the 5 per cent service tax for at least five years and to cap the aggregate indirect tax impact at 15 per cent.
Jehangir N Katgara, president of The Trave Agents Association of India said, "The tourism industry has faced a rough weather in the recent past. While a recovery is underway, it would take some time to wipe out the losses. At this juncture, we are looking forward to a rationalisation of taxes and additional tax incentives to the tourism sector by the government to make Indian tourism globally competitive."
"At a time when foreign countries like Malaysia, Thailand and the UAE are making money hand over fist by promoting tourism, India, with far superior inherent advantages should not let go the opportunity," Katgara added.
According to a study conducted by the Bombay Chamber of Commerce and Industry, the share of tourism in India's GDP is 5.6 per cent while the world average is 11.6 per cent.
The study also highlighted that investment in the tourism industry generate larger number of jobs compared with other industries.
For instance, while an investment of Rs 10 lakh in tourism sector creates 89 jobs, a similar investment 45 jobs and 13 jobs respectively in agricultural and manufacturing sector, respectively.
Run-up to the Budget 2003
