Lok Sabha Question No. 2244 (UNSTARRED), answered on 2021-03-08
Subject: Tax Cuts for Tourism and Hospitality Sector
Ministry: FINANCE
Asked by: Anumula Revanth Reddy

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 2244

TO BE ANSWERED ON MONDAY, MARCH 08, 2021 PHALGUNA 17, 1942 (SAKA)

## TAX CUTS FOR TOURISM AND HOSPITALITY SECTOR

2244. SHRI ANUMULA REVANTH REDDY:

Will the Minister of FINANCE be pleased to state:

- (a) whether it is a fact that Tourism and Hospitality sector is one of the worst-hit sectors by the Covid-19 pandemic;
- (b)  if  so,  the  details  of  tax  reduction  done  in  the  sector  to  save  the  Tourism  and  Hospitality Space; and
- (c) the subsector-wise details of financial reliefs given to the tourism sector keeping in view that the sector is one of the worst-hit by the pandemic?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a)    to (c):   The closure of travel and tourism industry due to Covid-19 had a cascading effect on the livelihood of people dependent on tourism. Ministry of Tourism has engaged NCAER to conduct a study on 'India and Coronavirus pandemic: Economic losses for household engaged in tourism and policies for recovery'.

In  view of the  challenges faced by tax-payers due outbreak of covid-19, the government has taken several taxation measures to improve the liquidity in different sectors including tourism and hospitality. These measures inter-alia include:

- i.   reduction of rates of Tax Deduction at Source and Tax Collection at Source for the nonsalaried specified payment made to residents by 25% for the period from 14 th May, 2020 to 31 st March, 2021.
- ii.   interest  for  delay  in  payment  of  income-tax  (e.g.  advance  tax,  TDS,  TCS),  Equalization Levy,  Securities  Transaction  Tax,  Commodities  Transaction  Tax  due  for  payment  from 20.03.2020  to  29.06.2020  to  be  charged  at  reduced  rate  of  9%  per  annum  (0.75%  per month), if the payment is made by 30.06.2020.
- iii.   the date for payment of self-assessment tax in case of tax payers whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 10 th January, 2021 (for non-auditable cases) and to 15 th February, 2021 (for cases where tax audit is mandatory).
- iv.   issuance of refunds of over Rs. 1,95,736 crore to more than 1.93 crore taxpayers between 1 st April 2020 to 22 nd February, 2021.
- v.   extension of Period of Vivad se Vishwas Scheme for making payment without additional amount to 30.04.2021.
- vi.    GST Council had reduced the GST rates significantly for hotel accommodation. GST rate for room having rent above INR 7500 was reduced from 28% to 18%. Similarly, for rooms having rent from INR 2500/- to 7500/- per night was reduced from 18% to 12%. GST rates on restaurant and catering services have also been reduced significantly since the roll out of the GST.

Further,  the  Ministry  of  Tourism  has  taken  a  series  of  steps  and  has  undertaken  various activities/initiatives to overcome this crisis and to promote domestic tourism as per the details in Annexure.

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The  following  steps  have  been  taken  by  the  Ministry  of  Tourism,  to  overcome  the  crisis caused by Covid-19 pandemic in the tourism sector:

- i.         Detailed operational guidelines for Covid safety and hygiene for hotels, restaurants, B&Bs/ Home stays and Tourism Service Providers have been formulated and issued on 08.06.2020 to facilitate smooth resumption of business.
- ii.          Validity of approval or certifications of hotels and other accommodation units whose project  approval/re-approval  and  classification/re-classification  have  expired  /  were likely to expire, has been extended upto 01 st April, 2021.
- iii.         The  Ministry  has  developed  an  initiative  called  SAATHI  (System  for  Assessment, Awareness  &Training  for Hospitality Industry), for effective implementation of Guidelines/SOPs issued with reference to COVID 19 and beyond for safe operations of Hotels, Restaurants, B&Bs and other units.
- iv.         Operational  Recommendations  for  safe  resumption  of  business  with  easing  of lockdown  restrictions  have  been  issued  for  various  segments  of  the  travel  and hospitality industry and circulated amongst all stakeholders.
- v.          Recognition  of  Travel  Agents, Tour  Operators,  Tourist Transport Operators by the Ministry of Tourism has been extended automatically by six months. Those who have submitted  applications  for  recognition  by  the  Ministry  have  been  given  provisional recognition for six months, pending completion of required procedures.
- vi.         In addition to the above steps taken by Ministry of Tourism, other agencies/Ministries of  Government  of  India  have  declared  stimulus  packages  like  loan  moratorium, waived  off  PF  contribution,  deferment  of  TCS  up  to October  2020,  collateral  free automatic loan under Atmanirbhar Bharat package etc. to revive the economy and industry including units of the hospitality industry.

In  order  to  tap  international  tourists,  the  Ministry  of  Tourism  through  the  India  Tourism Offices  overseas  proposes  to  undertake  various  promotional  activities  which  include participation in travel fairs and exhibitions; advertising in the local print, electronic, outdoor and digital media; organizing webinars to highlight success stories around COVID-19 in India to  build  confidence  among  foreign  tour  operators  and  travellers,  organizing  Road  Shows, India Evenings, Know India Seminars & workshops; organizing and supporting Indian Food Festivals  and  cultural  festivals;  offering  brochure  support  to  tour  operators,  and  joint advertising/joint  promotions  with  airlines,  tour  operators  and  other  organizations,  joint promotions in collaboration with the Indian Missions abroad etc.

The  Ministry  has  undertaken  the  following  activities  /  initiatives  to  promote  Domestic Tourism:

- i.    Dekho Apna Desh webinars.
- ii.     Aerial Photography of key cities and cultural assets (Delhi, Chennai, Kolkata, Mumbai, Bengaluru, Udupi, Aurangabad, Iconic Tourist sites) across the country during lockdown.
- iii.    Regular  consultations  with  industry  stakeholders  on  issues  related  to  opening  up  of Tourism sector,
- iv.    Handling of tourists, protocols of safety and security, service standards etc.
- v.     Domestic  Tourism  Promotion  Campaign  through  Webinars,  social  media  and  other digital platforms.
- vi.    Dekho Apna Desh Campaign has been the mainstay of Domestic Promotion. The main focus is to rebuild the trust of the domestic & international travellers in terms of India being the safe destination to travel in post Covid scenario.

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