Union Budget 2021: Travel industry hopes for tax exemption, financial aid

Ahead of the Union Budget 2021, the apex body of travel agents – Travel Agents Association of India (TAAI) – has suggested that the government outlay plans to enhance and boost travel and tourism by ensuring adequate support in ease of growing the industry

Ahead of the Union Budget 2021, the apex body of travel agents – Travel Agents Association of India (TAAI) – has suggested that the government outlay plans to enhance and boost travel and tourism by ensuring adequate support in ease of growing the industry. According to TAAI, Budget 2021 should allow leave travel concession (LTC) benefits, which could not be utilised owing to the pandemic, to be carried forward over the next two years. It also stated that it expects the government to fully exempt income tax for two years for all expenses made for travel, tourism, MICE (meetings, incentives, conferencing and exhibitions), adventure, domestic and religious travel, by the taxpayer.

Passengers wearing protective face masks leave Chhatrapati Shivaji Maharaj International Airport. (REUTERS)

In its recommendation to the ministry, TAAI stated that a structured insurance mechanism is required to secure the future of travel agents against principals, viz a viz securing all payments of consumers and travellers.

“The proposals on underwriting by the government towards all airline operators to and from India must also be secured in some form of financial security,” said the association.

Jay Bhatia, vice president of TAAI stated that travel and tourism trade should be granted an industry status and can be included in the concurrent list across the country which will help to produce high-quality service levels.

“We have requested that a single employee benefit or security policy benefit should be adopted under one proviso that will take care of labour welfare, industrial safety and health of self and a maintaining one-wage code across the country with Central and state governments,” Bhatia said.

The year 2020 witnessed the unforeseeable impact on the travel and hospitality industry due to the pandemic. The sector was severely hit with restrictions on both international and domestic travel. During the unlock phase, domestic tourism was the first to open up in May 2020.

The travel and hospitality industry is one of the largest providers of jobs and has a multi-pier effect on economic growth. Travel portals unanimously said that they are optimistic that the industry will continue to see buoyant growth, driving overall economic growth in the country.

“There is a need for greater collaboration between various stakeholders, be it the industry or the government, to create relevant policies and schemes for this sector. To see continued growth in the travel industry, we would like to see better spends to provide necessary infrastructural capabilities, public utilities and more amenities which would promote social distancing norms. Moreover, providing customers with tax incentives and fiscal measures to stimulate demand is critical for the sector. Relief on regulatory aspects on compliances such as TDS and TCS on online players, support to the inbound industry and measures to articulate the government’s plan will provide a roadmap and give clarity to the industry players,” said Dhruv Shringi, co-founder and chief executive officer, Yatra.com.