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Travel and tourism industry seeks SEIS incentive at 7% only
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SME Times News Bureau | 24 Sep, 2021
The travel and tourism industry has urged the government to restore the
Service Exports from India Scheme (SEIS) benefit to 7 per cent, as was
paid earlier, to support the sector that is one of the worst-hit by the
pandemic.
In a representation to the Commerce Ministry, the
Indian Association of Tour Operators (IATO) has said that while the
decision to release SEIS scrips for FY20 for tour operators is a welcome
move, it is disappointing that the benefit has been reduced from 7 to 5
per cent.
"Last one and a half years has been one of the worst
phases for the tour operators and in light of the debilitating hardship
endured, it is urged that the government restores SEIS benefit to 7
percent as was paid a year before," IATO President Rajiv Mehra said.
For
the last 18 months, inbound tour operators had almost zero income with
several of them folding up their businesses. In view of this, the SEIS
benefit was awaited for a long time as this would provide some financial
succour to help the tourism sector tide over this crisis.
During
the deliberations, the government was requested to raise it to 10 per
cent as a one-time measure, however, the lowering of the benefit and
capping it to Rs 5 crore has disappointed the industry.
The
reduction to 5 per cent will impact the small and medium tour operators
while cap of Rs 5 crore will badly impact the large tour operators.
"Tourism
has contributed significantly to the exchequer and has been a major
employer as well. In a distressful situation like this, the tourism
sector looks for assistance from the government for survival and
revival," the IATO said in a statement.
Under SEIS Scheme,
exporters of selected services were entitled to a incentive on the net
foreign exchange earned in the form of duty credit scrips. These SEIS
scrips could be used to pay import duty or can be encashed by selling it
to any importer.
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