?Dear Mr. Pandey,

Thank you so much to you and your leadership team ( Joint Secretary - Mr. Darpan Shah & Economic Advisor - Ms. Sangeeta Saxena) for your time for the ‘specific discussion’ on promoting foreign exchange earnings from tourism. 

As discussed, we are quickly jotting down points for your reference. 

As result of the pandemic, COVID-19 tourism, travel & hospitality industry in India has reached dire straits today. There are nil revenues and almost all tourism businesses are running out of working capital and are staring at mass unemployment and bankruptcies.

To salvage the industry, our request to Ministry of Commerce is placed below in order of priority

Increase the value of SEIS to 10% across all tourism, travel & hospitality companies. and enable an immediate credit against an earlier financial year performance at an enhanced value of 10% to manage a severe working capital crisis. Considering the dried up situation of cash flows it is requested to enable SEIS at gross FEE and not net FEE. 

Enable a zero rating in Gst of tourism exports for all segments of tourism: mice,  leisure, corporate. 

Enable a one year extension of all existing scrips from their validity period in 2020. 

Provide for a Gst refund on domestic purchases to make our tourism exports globally competitive. These can be prioritised by segments and phased accordingly beginning with MICE segment. 

Waive off all import duties required to upgrade tourism infrastructure 

Enable permission to import of tourist  vehicles under EPCG by tourism services exporters.

Enable an additional incentive for duty free imports of up to 5% of net FEE during current year

Treat at par with merchandise exports all tourism exports and deemed exports to give Indian tourism a chance to revive faster. 

Relax all export performance obligations and extend their tenure till the markets completely stabilise over the next couple of years. 

Defer all administrative compliances of EPCG. Requirement of net FEE over and above average of three prior years to meet export obligation, must be relaxed. 

Enable forward cover on ECB at a capped rate.

Additional Support 

Sir, most of the tourism enterprises balance their infrastructure for managing seasons. As all global source markets are hit, it will be domestic business of India  which will keep our tourism infrastructure running.

To keep the industry running and stable, there are some points, which  we could not raise on the call today, but are requesting the help of the honourable CIM for requesting the Honourable PM of India on the following : 

A complete deferment for twelve months of all statutory dues payable by tourism, travel & hospitality industry at the Central Government level, state and municipal government level without attracting any penal interest. These could include GST, Advance Tax payments, PF, ESIC, customs duties, excise fees, fixed power & water charges. 

A support fund ‘Tourism COVID 19 Relief fund’ to be set up by RBI or Ministry of Finance or Tourism to support salaries and establishment costs. It should be either in the form of an interest free loan to Tourism corporates for repayment of the principle within 5- 10 years. Alternatively, it could be a grant to support basic salaries with ‘direct transfer’ to affected tourism employees. 

A national tourism task force of all relevant ministries of the Central Government and chief secretaries of State governments and industry stakeholders. This should be with legislative powers on the lines of GST council for state wise standardised tourism response. 

RBI has already provided for three months moratorium on EMIs of principle and interest payments on loans and recalculation of working capital from Financial Institutions. This needs to be without any accrued and accumulated interest during this period and it needs to be extended for twelve months.  

To kick start tourism domestic business will have to be incentivised. Incentivise the Indian corporates for holding meetings & conferences in India with 200% weighted deduction of these as tax expenses against GST invoices.  Incentivise Indian citizens through LTA like income tax benefits for holidaying within India. These could be a deductible expense (for eg of upto ? 1.5 lakhs) against GST invoices. 

Enable Full refunds of cancellations and advances of travel agents & tour operators from airlines. Ensure that the refund money is secured from possible default of airlines especially foreign airlines as well as low cost airlines including advances /float accounts also to be refunded in full immediately as they are money for not issued tickets.  MOCA can ensure this through an executive ruling or a fund may be setup underwrite these payments to travel agents & tour operators which will be securitised against these receivable all airlines.  

The support scheme announced for PF of 90% employees < ? 15000 in organisations below 100 employees doesn’t cover a vast majority of the tourism sector.  Cover all tourism MSME employees above minimum wages across all states.  The scheme can also be covered under PM Rojgar Pradhan Yojana where PF contribution is already fully made by the government to promote enterprises. 

The insurance corpus of ESI needs to be used to provide paid wages relief to all -tourism employees for all accumulated days from non-availability of work and the act needs to be amended immediately as the PF act was done. The inability to work due to infection or risk of infection to self from a Pandemic and others is a valid reason  This is a forced "away from work  situation' under a force majeure and is WHO advised / GOI enforced for preventive care rather than face the medical expenses for curative care or fatality. The fatality rate was almost 5% globally and almost 10% in some countries and thus this leave from work needs to be covered under ESI. 

For all unorganised employees working with the tourism sector and who will not be covered by PF / ESI ensure coverage of sustenance wages and medical condition.

The clock is ticking fast on all payments commitments and if not addressed could put at risk  the survival of more than 26 lakhs tourism travel & hospitality enterprises. These include 53000+ Travel agents, 1.3 lakhs+  tour operators (domestic, inbound, adventure, cruise, outbound), 2700 + mice businesses, 19 lakhs + tourist transporters, 53000 + hotels, 5 lakhs + restaurants.

Some global examples.. 

We are sharing below some examples of countries which have extended sector specific help to tourism : 

In the US,  loans worth 2.5 times the average monthly payroll are being given. These are @ 1% interest but treated as a forgivable grant for the first 8 weeks, provided one adheres to the following criteria: 75% of this will be used to pay employees. The employer must maintain at least 90% of their previous payroll. The balance 25% is to pay rent, utilities, mortgage , insurance premium  etc.In addition, there is a separate disaster loan of up to $2M available @3.25% interest to be used in any way. 

In UK salary support for tourism enterprises have been given for 8 weeks. The business rates taxes for this sector have been completely abolished for 12 months which are the highest overheads for this sector there. As part of their £ 300 bn support, the businesses have been given access to fully guaranteed, unlimited loan by the Government to meet their working capital requirements. Their COVID-19 business continuity scheme guarantees interest free loans for 12 months. Their VAT & taxes have been deferred. They are estimating their total Government aid to their businesses to go upto 15% of their GDP and have aimed at being bold and not conventional in their support to the industry during this epidemic. The Corona Job Virus scheme covers upto 80% of salaries of all their employees upto a pay of £ 2500 per month 

In Indonesia, immediate tax relief was announced to the tourism industry. To hotels & restaurants tax breaks have been given, to airlines & travel agents, financial incentives have been given, to domestic tourists for visiting domestic destinations, incentives have been announced and VAT discounts have been given to airlines. They are also compensating their states for losses from tax breaks given to tourism, travel & hospitality industry. Their initial stimulus package is estimated at almost a billion dollars.

In Thailand, their Finance & Tourism Ministries are working together to deploy a tourism relief package. They are laying out tax reliefs from the Government, support from the banks at reduced cost of funding and soft loans for working capital to prevent job losses in the tourism industry. Additionally, they have also planned to revive of the domestic tourism economy through incentives for events & seminars and tax incentives for domestic travel within the

Sir, we look forward to your support and to the kind support and help of the honourable CIM with the honourable PM to bail out Indian tourism - the industry with the highest employment intensity. 

We thank you and your team once again and look forward to urgent help of support.  

With prayers of safety for all!