Finance Minister Arun Jaitley on Wednesday sent out a cautionary note to the tourism industry over its expectations of moderate tax rates in the proposed goods and services tax (GST) regime.
Tax rates cannot be moderate if the industry continues to thrive on exemptions and incentives, Jaitley said in his inaugural session of the first ever ‘Incredible India Tourism Investors’ Summit 2016’ here.
“More the exemptions, higher will be the rates,” Jaitley said, adding that India cannot indefinitely survive on exemptions and concessions.
Earlier, giving out the tourism industry’s perspective, Vivek Nair, Chairman & Managing Director, Hotel Leelaventure, urged the Finance Minister to keep the maximum rate of GST applicable on the tourism (including hotels) industry at 10 per cent.
The GST rate should not exceed 10 per cent if India were to compete with neighbouring tourist destinations, he added.
Jaitley’s latest remarks on tax rates is crucial, as the newly formed GST Council will, in the coming days, get to the most important task of firming up the GST rates for various sectors.
Meanwhile, Jaitley also highlighted that tourism offers potential of large volumes and that the Centre also needs to play a more facilitating role to attract investments in this industry. There is also a need to preserve monuments and improve the marketing of them, he added.
Speaking on the occasion, Andhra Pradesh Chief Minister Chandrababu Naidu urged Jaitley to spend more money on tourism, stating that more employment could be created from any such move.
Tourism Minister Mahesh Sharma said the Centre is committed to improving the tourism infrastructure in the country. “At India, we are committed to take tourism to new heights,” he said.
The Centre will soon add another 25 countries whose citizens will be eligible to avail of e-visas for travelling to India. Already e-visas are allowed for 150 countries, Sharma added.