A parliamentary standing committee has recommended that the tax regime applicable to the travel and tourism sector be reviewed in order to increase India’s share in the global tourism market from the present 1.24 per cent to five per cent.
The Committee on “Promotion of Indian Tourism in Overseas Markets – Role of Overseas Tourist Offices and Indian Embassies”, headed by BJP MP T G Venkatesh, said the ministry should conduct surveys periodically in important source markets for India to assess the impact of the publicity campaigns on the decision of foreign tourists to visit India, the perception of the foreign tourists about the various facilities at tourist destinations, the preference of foreign tourists about the tourism products and destinations. The committee in its report tabled in Parliament on Thursday proposed that the ministry recast its website in a more user-friendly manner.
“The ministry should formulate an integrated marketing and promotional strategy to position India as a favoured tourism destination in the tourism generating markets overseas and increase India’s share of the global tourism market from the present 1.24 per cent to 5 per cent in the years to come. “One of the major reasons for India’s inbound tourism remaining grossly under-utilised has been the high rates and multiplicity of taxes that deter inbound tourism and have led to tourist packages being out priced vis-a-vis those in competing tourist destinations of other countries,” it said.
The committee further pointed out that the tax structure applicable to hotel accommodation, air travel, food and beverages consumption, not only “leads to tourist packages being over-priced but also obstructs seamless flow of tourists to our historical sites.” It also noted that despite inbound tourism being a major foreign exchange earner with foreign exchange earnings of Rs 2,11,661 crore in 2019, the taxes levied on inbound tourism are among the highest in the country.
“The committee, therefore, recommends that the tax regime applicable to the travel and tourism sector be reviewed holistically so that with suitable amendments India can convert its comparative natural and economic advantages into competitive advantages for the tourism sector,” it said.