TTT NEWS NETWORK
NEW DELHI, 22 JULY 2024:
Mr. Sanjay Dighe, CEO & Director of Krystal Integrated Service Ltd:
The budget this year has the power to significantly impact the services sector, and we expect it will prioritize growth initiatives in the sector. The sector needs streamlining of regulations and reduction of compliance burden.
The GST tribunals need immediate operationalization. They are crucial to efficient resolution of backlog of GST-related disputes.
There is clarity required on tax exemptions for services provided to government entities, particularly in healthcare sector. At a practical level, the point of taxation for manpower and security services needs to be changed from a billing system to a receipt-based system. This would significantly enhance cash flow management for services companies and align their taxation with actual revenue received. While the GST Council typically takes decisions on such matters, we hope the central government will consider these concerns in the upcoming Union Budget.
Mr. Madhavan Menon, Executive Chairman, Thomas Cook (India) Limited (Thomas Cook, SOTC, Sterling Holidays and TCI):
The Travel & Tourism sector represents a vital economic driver: The World Travel & Tourism Council (WTTC) 2024 projects that Travel & Tourism will contribute almost INR 21.15 trillion to the India’s GDP in 2024, a marked 21% above 2019 levels. With jobs predicted to increase by 2.45Mn this year, this represents one in every 11 jobs in the Country.
India’s Travel & Tourism sector represents a strong force multiplier – across allied sectors, employment generation and foreign exchange receipts. Our expectations from the Union Budget include key pivots to transform India into a destination of choice:
Infrastructural Focus: As a key fundamental for the sector, setting up of new airports via private participation must become a priority – thus creating a viable hub & spoke model; also rapid expansion in rail, road and waterways (sea and river cruises). Additionally, infrastructure development for high growth areas like religious circuits and underleveraged hidden gems (Lakshadweep).
Inbound Tourism: revival of the Inbound incentive scheme – but for select destinations.
Tax:
- Reduced Income tax levels to provide increased disposable income in the hands of the people – a boost for travel & tourism spends
- LTA exemption annually, against twice in 4 years to catalyse domestic tourism
- We would recommend lowering of TCS to 1%. If not, a standardisation at 5% on foreign travel packages (against the current 5% and 20% slabs).
- Clarification on applicability of Section 194O on E-commerce: This defeats the government’s focus on digital India and ease of doing business.
- Section 53 of GST should exempt travel agents. There is no revenue loss for the Government, as airlines are already discharging tax on their sale.
- Clarity wrt TCS on Forex card payments
GST is a key area and our wish list for Budget 2024-25 includes:
- Allow GST input credit facility for inbound and domestic tourism
- Centralise similar issues faced by a single assessee in multiple states – reducing unwarranted time, efforts and litigations in multiple jurisdictions
- Simplify the compliance mechanism in filing reports, reconciliations, audits
Additionally:
- For technical matters, amendments and interpretation: we would recommend a collaborative approach between the authorities and tourism stakeholders towards better understanding and compliance.
Pre Budget Expectation quote from Mr. Amit Jaipuria, Founder and CEO at Postcard Travel Club, “The government’s intention to make sustainable tourism a national priority for revenue and employment in its third term is a great signal for the travel industry. Policy incentives for making tourism more sustainable should be put in place and the use of storytelling to showcase regions and cultures should be further emphasised. The government should also consult with the leading voices in sustainable tourism such as the Global Sustainable Tourism Council, Transformational Travel Council, The Long Run, and Rare India for infrastructure development that respects the environment and empowers local communities. The government can also subsidize tax and offer tax relief to properties following sustainable practices. This can create a conducive environment for more responsible properties to come up in India and promote inbound tourism.”
Aviation budget quote:
“India has made several great strides in aviation in recent years. Yet, for India to transform into a leading aviation hub, the focus must be on building self-sufficient aviation clusters, bolstering maintenance, repair, and overhaul (MRO) support, and encouraging innovation.
A region like Hosur which is a key node of the dedicated Tamil Nadu Defence Industrial Corridor can gain a definite advantage with a world-class airport under the UDAN scheme. This will give an impetus to the sector’s manufacturing and R&D efforts in the corridor and strengthen the local supply chain. This will help delink the availability of sector-critical materials from global logistical challenges.
The cost of spares for aircraft engines and components clocking approximately 80% and 55% of the overall cost of MRO services. Therefore, it is important to consider incentivising domestic production
of critical raw materials such as Yttria-stabilized Zirconia, the primary material for thermal spray coatings and thermal barrier coatings. These protective coatings help increase aero engine and component longevity, reducing the frequency of expensive overhauls. Building dedicated facilities for R&D, testing, and certification accelerate research and innovation in strategic new-age nanomaterials such as graphene for the civil and military aviation wings.” Subbu Venkatachalam, Head of Marketing, Carborundum Universal Limited.
By Gaurav Malhotra, Managing Director, hansgrohe India:
“For the Union budget, we are optimistic about the positive measures that will bolster the luxury real estate sector and enhance the overall market dynamics. This aligns with the growing aspirations towards a luxury lifestyle, where consumers seek high-quality, sophisticated home interior solutions. We urge the government to put a rationalization on GST and reduce home loan interest to stimulate demand and growth for the luxury real estate sector. Additionally, we hope to see initiatives aimed at boosting local manufacturing capacity that can further strengthen the make-in-India initiative and also increase the availability of world-class products in the domestic market.
These strategic reforms will collectively contribute to the growth of our industry and enable us to continue delivering innovative solutions that can meet the high standards of luxury and cater to the individuals who are aspiring to live a luxury lifestyle.”
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