TBM Staff - Mumbai
In her Budget speech, the Hon’ble Finance Minister Nirmala Sitharaman once again overlooked the Travel Trade sector in India, leaving industry stakeholders disheartened. Despite pre-budget requests from the Travel Agents Association of India (TAAI), there was no response from the Government, which came as a shock to the association.
TAAI highlighted that the sector, a key driver of economic growth and employment, remains underfunded and neglected in the latest budget. While the FM emphasised infrastructure development for a few religious locations, TAAI noted that these areas require significant investment and connectivity improvements. Instead of enhancing existing popular locations and ensuring last-mile connectivity, the government is focusing on less accessible sites with limited interest from both domestic and inbound tourists.
Although the reduction of TDS for e-commerce platforms from 1% to 0.1% and the introduction of a simpler tax regime for foreign shipping companies operating domestically were appreciated, many of TAAI’s critical requests were ignored. The call for a reduction in Aviation Turbine Fuel (ATF) to lower airfares and boost travel growth was not addressed. Additionally, there was no consideration for the rationalisation of GST rates for inbound, outbound, and domestic travel, nor for permitting GST input credit for interstate hotel rates, which would benefit hotels and passengers alike.
TAAI also expressed concerns over the continued imposition of TCS on outbound travel, which hampers the ease of doing business for Indian travel agents and tour operators, increasing competition with global players who do not levy such taxes. They reiterated the need for the travel and tourism sector, specifically travel agents and tour operators, to be included in the concurrent list and granted industry status. The budget’s lack of robust campaigns to boost domestic tourism was seen as a missed opportunity, particularly in the current global context where promoting local travel can drive immediate economic benefits and foster a culture of exploring India’s diverse attractions.
