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IATO decries neglect of tourism sector in Budget 2013

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IATO is upset over neglect of tourism sector in Budget 2013. “Tour operators have little to rejoice about budget outcome,” said Subhash Goyal, president, Indian Association of Tour Operators (IATO) and chairman, STIC Travel Group. “We expected that the Budget will bring some relief to our mounting woes by reducing the service tax as this is the only one special request we have been making since last few years. But successive governments had only ensured that tourism sector is not given any relief,” stated Goyal.

The service tax has made India a cost prohibitive destination. The tourism sector is estimated to contribute more than 6 per cent to the GDP and more than 9 per cent to the employment. “Present service tax level exacerbated by high fuel price and swine flu threat will further push down the demand for India holidays. In the present budget the inclusion all AC restaurants and cafes more than 2000 square feet to pay service tax is also adding to the continued woes. In extreme weather condition in India during summer and winter it is a basic requirement to have a meal in a restaurant which have space to breathe. Similarly increase in import duty on high end motor vehicles from 75 per cent to 100 per cent is also going to impact negatively the tourism industry. We require comfortable cars for tourists, especially when in India there is constant effort to improve the highways and which can boost surface tourism in a big way,” added Goyal. He mentioned however that in this budget there is some high plan allocation for infrastructure (roads, hospitals, etc) which will bring benefits to tourism also as tourism is lacking growth mainly because of lack of basic infrastructure in India.