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Friday, 20 March, 2020, 15 : 45 PM [IST]

CII proposes slew of action points seeking government support for reviving the T&T industry

With the increasing pandemonium due to the COVID-19 pandemic, the hardest hit is the travel & tourism and hospitality sectors. While industry players which were already struggling with the economic slowdown are staring at massive cancellations and refunds and an uncertain future, salary payments and job losses are only adding to the entire chaos. At this juncture, the Confederation of Indian Industry (CII) has proposed action points that would allow the industry to revive and let the government adhere to its fiscal commitments.  

For the tourism and hospitality sector, CII has proposed six to nine months’ moratorium on all working capital principle, interest payments on loans and overdrafts bringing in liquidity allowing for business continuity, without categorising the companies as NPAs. Additionally, it has also called for the deferment of GST and advance tax payments at the Central government level and removal of fees for upcoming licenses, renewal of permits, and excise exemption for liquor for the hospitality and travel industry across states.

A 50% reduction in Heat-Light-Power (HLP) costs has been suggested for sustaining businesses. Amendments in the Export of Services (SEIS) and the Export Promotion Capital Goods (EPCG) have been sought on an urgent basis including the grant of extension in export obligation fulfillment period by an additional three years beyond 6 years, for all the licenses expiring during current and next 2 financial years, without attracting any penalty or interest.

Other actions such as advisory to airlines to not levy cancellation fees and issuance of full refunds or credit notes; deferring the proposed TCS on travel in the Finance Bill 2020; doubling the overdraft facility for the industry and immediate cash relief to avoid mass-layoffs; and financial support under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) or a similar scheme to be extended to the entire industry to prevent employment loss; have also been suggested.
 
For the aviation industry, CII proposes to bring Aviation Turbine Fuel (ATF) under the ambit of GST which would enable full input tax credit on all goods and services and provide long term relief to the airlines. The industry also seeks rationalisation of VAT across states up to 4% as against the existing differential VAT rates across states or locations.
 
CII has also recommended a 100% waiver on existing air navigation services (ANS) charges for the duration of COVID-19. Rebates on landing, parking and housing charges have also been suggested including a 100% waiver of parking and housing charges for a temporary period of six months.
 
To provide immediate liquidity to reduce the current financial stress in the sector, CII has also requested the Government to intervene and urge airports to reconsider bank guarantees and security deposits. As airline costs are substantially impacted by fuel costs, CII proposed extending unsecured interest free credit terms by oil companies to the sector. 
 

 
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