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Tuesday, October 3, 2023

Government must Remove SEIS Cap & Restore Scrip Rates to Support Ease of Doing Business in Tourism: FAITH


FAITH, the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) has flagged critical concerns in the just released SEIS notification.

They have made reference to the SEIS entitlement through duty credit slips through notification no: 29/ 2015-20, dated 23rd September 2021 (notification), which will bring some relief to cash starved tourism enterprises after almost 18 months of a severe pandemic.

However, they have raised two requests for urgent amendments in the notification. The first is the mention in point 2, referring to para 3.08, to scrip rates for Sector – Tourism & Travel Related Services as specified in the annexure, Appendix 3x. The notified rates of duty credit have been brought down from 7% and  5% to 5% and 3% respectively to travel agencies tour operators services ( CPC – 7471)  hotel & restaurants (CPC – 641-643) respectively .

FAITH has said that this decrease is going to be a massive hit on the cash flows of tour operators & hotels who made continued critical financial commitments in international markets in FY 2019 -20 to enable the increase of international travellers to India beyond 17 mn which led to India’s global market share of international arrivals beyond 1%.

FAITH has requested that Sector – Tourism & Travel Related Services be exempted from this notified rate decrease as Tourism, Travel & Hospitality Related Services has been the worst affected industry from the pandemic. This has been highlighted in the Kamath RBI report and has been acknowledged multiple times across all representations of the Central & State Governments.

FAITH has also said that as notified, under point 4, there has also been placed a cap of ₹5 crores on SEIS entitlement for per eligible entity for FY 19-20.

They have said that Indian tourism travel and hospitality industry is a mix of large, medium, small & micro tourism travel & hospitality industry. Each of these players have risen above & beyond their sizes to contribute to growth of Indian Tourism, valuable foreign exchange & thus crucial jobs. Setting such a cap will be a major disincentive to large & medium players in their efforts to take tourism enterprises ‘Made in India’ global. FAITH has requested to remove this arbitrary cap of ₹ 5 crores on SEIS entitlements for tourism, travel & hospitality industry.

Addressal of these concerns will bring in ease of doing business and remove any policy uncertainty in the Indian Tourism Travel & Hospitality industry.

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