NEW DELHI: The Federation of Associations in Indian Tourism and Hospitality (FAITH), the nodal agency and policy federation of all the national associations representing the tourism, travel and hospitality industry has written to prime minister Narendra Modi stating the tourism industry is in dire straits because of the COVID-19 pandemic

“With declining revenues almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your support now more than ever,” stated the letter written by industry veteran Nakul Anand, executive director, ITC and chairman of FAITH.

Other signatories in the letter include IHCL CEO Puneet Chhatwal, who is also the president of Hotel Association of India (HAI), Pronab Sarkar, president, Indian Association of Tour Operators (IATO), Amaresh Tiwari, vice chairman, India Convention Promotion Bureau, Satish Sehrawat, president, Indian Tourist Transporters Association, PP Khanna, president, Association of Domestic Tour Operators of India (ADTOI) and Urvashi D Mohan, managing committee member Travel Agents Federation of India (TAFI) among others.

In the letter, FAITH has requested for a complete GST tax holiday for the tourism, travel and hospitality industry for twelve months.

“With almost nil revenues there is hardly going to be any GST collection,” the letter stated.

FAITH said as a result of this pandemic, the Indian tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment. “It is believed that around 70% out of a total estimated workforce of 5.5 crore (direct and indirect) could get unemployed (3.8 crore).This effect of job losses and layoffs has already begun throughout the country,” the letter stated.

The federation has also requested for a twelve months’ moratorium on EMIs of principle and interest payments on loans and working capital from financial institutions besides a doubling of working capital limits on interest free and collateral free terms.”This will prevent all our tourism businesses from going bankrupt,” FAITH stated in its letter.

FAITH has also sought a support fund for 12 months on the lines of MNREGA to support basic salaries with direct transfers to affected tourism employees. The federation has also asked for the setting up of a national tourism task force under PM’s leadership to fast track all tourism investment proposals and to withhold the tax collected at source (TCS) on travel provision proposed in Finance Bill 2020 which is to be introduced from April 1. FAITH believes TCS on travel will displace business from India to overseas markets.

A deferment of twelve months for all statutory dues like advance tax payments, PF, ESIC, customs duties at the central government level or at any state government level, the excise fee, levies, taxes, power and water charges, bank guarantees and security deposits and deferment of all renewals, across the tourism, travel, hospitality and aviation industry is another request from FAITH.

Meanwhile, Dipak Haksar, chairman of CII’s National Committee on Tourism and Hospitality has also written a letter to PK Sinha, principal advisor to the prime minister listing some recommendations for the revival of the sector.

CII’s recommendations include release of SEIS and EPCG schemes on an urgent basis based on last year’s submissions of foreign exchange earnings of companies at an enhanced rate of 10%, GST refunds on MICE cancelled events, a six to nine months’ moratorium on all working capital principle, interest payments on loans and overdrafts bringing in liquidity.

Deferment of GST and advance tax payments at the central government level, doubling the overdraft facility for the industry and provision of short term interest free or low interest loans for rebuilding businesses are among other suggestions.

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