Besides urging the Centre for extension of loan moratorium, the hotel and travel industries have also demanded deferment of GST and advance tax payments and waiver of fees for all forthcoming licences and permits.
Battered and bruised by the COVID-19 pandemic, the country’s travel and hospitality industry is staring at a Rs 5-trillion revenue loss over the next year while 35-40 million jobs, both direct and indirect, are in jeopardy.
The nationwide lockdown has shuttered hotel and travel sectors, clogging their earnings.
The distressed industry has sought a bailout package from the finance ministry to sustain its business in the aftermath of the pandemic.
Among the foremost demands of the industry is to extend the tenure of moratorium on loans pegged at three months by the Reserve Bank of India (RBI) to 12 months in view of the impact.
“While the industry has received the moratorium for three months, however, it needs a minimum of one year moratorium on all working capital, principal, interest payments, loans and overdrafts.
“Collateral and interest free loans up to five years for SMEs (small and medium enterprises) in tourism, which will help them, sustain and rebuild,” J K Mohanty, co-chairman of Ficci national tourism council and secretary, Hotel Association of India, wrote to Finance Minister Nirmala Sitharaman.
The hotel and travel industries have also demanded deferment of the goods and services tax (GST) and advance tax payments at the Centre and waiver of fees for all forthcoming licences and permits.
They have suggested that the GST rates on the hospitality industry should be slashed for at least two to three years.
As of now, large hotels attract GST of 12-18 per cent, based on room rates charged.
The aggrieved industry feels this could be pruned to 5-6 per cent.
The other key demands lined up by the industry include restoration of Service Exports From India Scheme for duty credit of 10 per cent to tourism industry and bringing Aviation Turbine Fuel under the GST ambit to offer long-term relief to airlines apart from offering rebates on landing, parking and housing charges.
“Indian corporates can be incentivised for holding meetings and conferences within the country with 200 per cent weighted deduction of these as tax expenses against GST invoices.
“Besides, Indian citizens can also be incentivised through LTA like income tax benefits for holidaying within India.
“This could be a deductible expense for instance up to Rs 1.5 lakh against GST invoices,” Mohanty, also the chairman of Hotel & Restaurant Association of Odisha, suggested to the finance minister.
Separately, HRAO has pleaded to the Odisha government to waive the state GST (SGST) until normalcy is restored.
As the salary component of the staff and employees accounts for 25-30 per cent of the payout by hotel owners, the association has suggested that the state government could extend interest free financial assistance to the stakeholders for payment of salaries and wages to the affected employees from ‘Odisha Labour Welfare Fund’ for at least six months.
- Coronavirus Attack
Source: Read Full Article