Ref No. DEL/IATO/2020                  17h March 2020

Smt. Nirmala Sitharaman 

Minister for Finance 

Government of India  

North Block 

New Delhi-110001

SUB: IMPACT OF CORONAVIRUS (COVID - 19) ON THE TOURISM INDUSTRY AND IATO’S RECOMMENDATIONS FOR SURVIVAL OF THE TOURISM INDUSTRY 

Hon’ble Minister Madam, 

Namaste from Indian Association of Tour Operators (IATO) !

The Indian Association of Tour Operators (IATO) is the National Apex Body of Tour Operators with membership of over 1600 across the country. Our membership consists of the nation’s inbound tour operators, travel agents, hotel chains, airlines, state government tourism departments/state tourism development corporations, press and media and other stakeholders in the tourism & hospitality industry. The Membership of IATO controls over 90% of all inbound tourism into India. 

With the ongoing global crisis of Coronavirus (COVID 19), tourism industry is badly affected. As per the preliminary reports coming in from our members we have lost about 15 lakh foreign tourists arrivals in the month of March and April and we are not sure of the future business. Tourism industry will go into big loss of about 15,000 crores of foreign exchange. This has caused lot of our members business going into big losses and some small companies are on the verge of closing their business, as they are not in a position to meet the expenses and survive. Tourism is an economic activity, which is providing highest jobs all over India and we expect loss of employment in large numbers as per the present situation.    

At this time of global crisis, the tourism industry is looking for support from the Government for survival and avoid loss of jobs. 

What does the India Tourism Industry need TODAY !

(A)       Short term actions needed for the industry to survive (immediate)

(B)       Medium Term Actions needed to boost recovery (1-6 months)

(C)       Long Term Actions needed to boost recovery (6 - 12 months)

(A)       SHORT TERM ACTIONS NEEDED FOR THE INDUSTRY TO SURVIVE (IMMEDIATE)

  1. We request our government to give bailout financial package  to defray the salaries of the employees which can be decided based on the turnover of the company in last financial year and the employees strength.      
  2. A six to nine months’ moratorium on all principle and interest payments on loans and overdrafts brining in liquidity allowing for business continuity. 
  3. Deferment of GST & Advance Tax payments at the Central Government level and removal of fees for any upcoming licenses/permits renewal/ Excise exemption for liquor for the hospitality and travel industry across the states. 
  4. Exemption of GST on Foreign Exchange Billings by the Tour Operators for Inbound Tours. 
  5. GST rebate / benefits deemed exporter status may be extended to tourism industry at par with it industry under export of services.
  6. Removal of Cascading Effect of GST on Tourism Industry or GST to be charged on deemed value. 
  7. Tax Holiday to Tour Operators for Two years for the financial year 2019-20 and 2020-21. 
  8. Deferment of the TCS on Travel in Finance Bill 2020 as this situation shall help shift business to foreign operators directly foregoing even GST. 

(B)       MEDIUM TERM ACTIONS NEEDED TO BOOST RECOVERY (1 – 6 MONTHS)

  1. Short term interest free or low interest loans for the tourism sector for rebuilding business and immediate transmission to the industry on term loans and working capital loans..
  2. A complete GST Tax Holiday for the Tourism, Travel & Hospitality Industry for the next twelve months till the time the recovery happens.
  3. Fast track all GST refunds for the industry wherever they are getting stuck.
  4. Creation of an industry task force to create a recovery plan as already done by our competing destinations. This must consist more than association leaders. 

(C)       LONG TERM ACTIONS NEEDED TO BOOST RECOVERY (6 - 12 MONTHS)

  1. To boost mice Tourism in country 200% weighted exemption of expenses to corporates on all domestic conferences.
  2. Restoration of SEIS scrips for duty credit of 10% to Tourism, Travel & Hospitality industry for next 5 years. Suggestion 15% during off season April to March.
  3. Relaxation in the Marketing Development Assistance (MDA Scheme)
  4. A national tourism task force of the Centre and the States, which should meet regularly and develops the revival plan and fast tracks investment approvals.
  5. Fast track all GST refunds for the industry wherever they are getting stuck.

Our singular focus is on business continuity and survival of the industry.

Explanation – 

  1. We are not asking for a loan waiver, just a delay on payments as our cash flow will now go down to zero for inbound and majorly decreased for domestic and other segments. We are expecting for next 6 months, no business to travel companies means no ability to meet basic costs
  2. If we do not get this support, the tourism industry in the next 45-90 days will find itself unable to pay back loans and the banks will be flooded with NPAs. We will also probably see bankruptcies emerge among many of us. 
  3. The industry wishes to avoid mass lay-offs of employees. But this will be inevitable if we do not get immediate cash relief. There are also today zero re-employment opportunities across the industry for anyone let go. Tourism is one of the largest employers in the country and so the quantum of this disaster can only be imagined. 
  4. Every segment of the tourism industry is affected directly on employment 

The Association prays that the above suggestions may kindly be considered by the Ministry of Finance based on their merit and keeping in view the challenges Indian Tourism Industry is facing due to which we are unable to sustain in business. This is also resulting loss of employment as the staff strength is reducing day by day. 

Your favourable approach will help the industry to survive.

We are ready to can call on you at a short notice to explain our problems as per date/time convenient to you and explain our problems.

 

Thanking you and with best regards

Yours sincerely,

For INDIAN ASSOCIATION OF TOUR OPERATORS

 

SARKAR SIR SIGNATURE BLUE 2
 

PRONAB SARKAR

PRESIDENT     

(M) 9811102111

  

Copy to:-  

 

Shri Debasish Panda 

Secretary (FS) 

Ministry of Finance

Government of India

North Block

New Delhi 

 

Shri Ajay Bhushan Pandey

Revenue Secretary 

Department of Revenue

Ministry of Finance 

Government of India 

North Block 

New Delhi 110001

 

Shri Atanu Chakraborty 

Secretary (Economic Affairs)

(Department of Economic Affairs)

Ministry of Finance, 

Department of Economic Affairs 

North Block, New Delhi