Ease of doing business must be addressed by removing SEIS cap, restoring scrip rates: FAITH

The Federation requests tourism sector and travel-related services be exempted from notified rate decrease

FAITH, the policy federation of all national associations representing India's tourism, travel, and hospitality industry (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI), has raised critical concerns about the recently released SEIS notification. They have made reference to the SEIS entitlement through duty credit slips via notification no: 29/ 2015-20, dated September 23rd, 2021, which will provide some relief to cash-strapped tourism enterprises after nearly 18 months of a severe pandemic.

They have, however, made two requests for urgent changes to the notification. The first is a reference in point two to scrip rates for Sector - Tourism & Travel Related Services as specified in the annexure, Appendix three x. The notified rates of duty credit have been reduced from seven per cent and five per cent to five per cent and three per cent for travel agencies tour operators services (CPC - 7471) and hotels and restaurants (CPC - 641-643) respectively.

FAITH has stated that this decrease will have a significant impact on the cash flows of tour operators and hotels who made critical financial commitments in international markets in FY 2019-20 to enable an increase in international travellers to India beyond 17 million, resulting in India's global market share of international arrivals exceeding 1per cent.

The Federation has requested that the sector of tourism and travel-related services be exempted from the notified rate decrease because tourism, travel, and hospitality-related services have been the hardest hit by the pandemic. This was highlighted in the Kamath RBI report and has been acknowledged numerous times by the Central and State Governments.

FAITH has also stated that, as notified, a cap of 5 crores has been placed on SEIS entitlement for each eligible entity for FY 19-20. According to them, the Indian tourism travel and hospitality industry is a mix of large, medium, small, and micro tourism travel and hospitality businesses. Each of these players has risen above and beyond their respective sizes to contribute to the growth of Indian tourism, valuable foreign exchange, and, as a result, vital jobs. Setting such a cap will be a significant deterrent to large and medium-sized players in their efforts to take ‘Made in India' tourism enterprises global. FAITH has requested that the arbitrary cap of 5 crores on SEIS entitlements for the tourism, travel, and hospitality industries be removed.

Addressing these concerns will make doing business easier and remove any policy uncertainty in Indian tourism travel.

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