The decision will act as a deterrent for the tourism sector which was pinning its hope on the revival of business during the festival season when people look to travel to their home states, FAITH said.
‘Cash-for-LTC a big blow to tourism’ Federation of Associations in Indian Tourism & Hospitality, the policy federation of all the national associations representing the complete tourism, travel, and hospitality industry of India expressed disappointment for the Indian Travel & Tourism Industry that LTC funds of government employees are being redirected to buy consumer goods. FAITH said that coming on the back of a prolonged lockdown, the Indian Travel & Tourism industry was looking at festive season holidays to boost travel demand when people look to travel to their home state.
“After almost 8 months of nil to now very limited tourism activity, Festive season was one of the few demand drivers that the Indian tourism travel & hospitality industry was looking forward to and the industry was hoping for more tax-based stimulus in the hands of all Citizens to travel when spent against GST rated travel agents, hotels tour operators, tourist transporters & restaurants. Instead redirecting the LTC money of government employees to buy consumer goods would dry up those funds for the travel sector. Additionally, it would also send a vote of no confidence to the tourism travel & hospitality industry which was looking to get back on its feet after Unlock,” FAITH said in a statement.
Additionally, since this is a 4-year block scheme it will also cut away funds for future travel demand source for the next year when the LTC block ends in 2021. This thus goes against the spirit of domestic tourism push and the year 2021 as domestic tourism year being planned by the tourism ministry. It is requested that not only the LTC funds be restored but also an income tax benefit be introduced for all citizens to get income tax exemption while travelling within India up to ₹1.5 lakhs against GST registered travel agents, hotels tour operators, tourist transporters & restaurants, a statement from the body said.
Additionally, the way states are being extended tax-free funds payable over 50 years, the tourism industry which is the most stressed currently and also the most employee intensive be given similar tax-free funds on a direct benefit transfer for salaries & operating costs payable over 10 years post COVID.
“The government’s move is contrary to our suggestions where we demanded that LTAs be used to incentivize travel. But the government announcement will discourage travel as even those who have savings would like to encash their LTAs,” said Jyoti Mayal President, Travel Agents Association of India (TAAI).