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Monday, 12 August, 2019, 12 : 15 PM [IST]

Tourism industry asks the government to reinstate 7% SEIS incentive

The tourism industry in the country has urged the government to continue with the 7% Service Export from India Scheme (SEIS) incentives as the travel and tourism industry in the country is facing challenges due to slowdown in the inbound business. Ministry of Commerce, Government of India had reduced the 7% SEIS incentives to 5% from August 1, 2019.

Indian Association of Tour Operators (IATO), the apex association of inbound tour operators in the country, has asked the government to reinstate the 7% incentives until the new policy is framed next year.  

The decision to cut the incentive by 2% across service sectors by the government at a time consultation are on for an upward revision has become a cause for concern for businesses. “We want the same to continue, without which we cannot survive,” said Pranab Sarkar, President, IATO while addressing the members at a recent Association meeting in Delhi.

“We understand that the government has reduced it because of the pressure from international agencies like WTO. But we want the same to continue beyond 2020,” said Rajiv Mehra, Vice President, IATO.

Introduced under the Foreign Trade Policy (FTP) of the government for five years (2015-20) to incentivise service industry and service providers providing services from India to organisations outside India and earn foreign exchange for the country, the key objective behind it was to make such services globally competitive. Under SEIS, the services providers of notified services are incentivised in the form of Duty Credit Scrips on their net foreign exchange earnings. These SEIS scrips are transferrable and can also be used for payment of a number of Central duties/taxes including the basic customs duty.  


 
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