The Travel and Hospitality Industry are staring at a revenue loss of Rs.5 Trillion: Covid-19

The whole travel and hospitality industry is distressed and has sought a bailout package from the Finance Ministry so that they can at least sustain their busin

The Hotel and travel industries of India have demanded a deferment of the Goods & Services Tax (GST) as well as the advance tax payments at the level of Central government. In addition, they have also demanded a waiver of fees for all the upcoming licenses and permits.

Crippled by the coronavirus pandemic, India's travel and hospitality industry are staring at a loss of Rs 5 trillion of Revenues during the next year and more than 35-40 million jobs are now in jeopardy, indirect and direct both.

The nationwide lockdown in the wake of the coronavirus pandemic has resulted in a complete shutdown of the hotel and travel sectors hence, stopping the cash inflows and affecting their earnings.


The whole travel and hospitality industry is distressed and has sought a bailout package from the Finance Ministry so that they can at least sustain their business during and after the coronavirus outbreak. The industry has also made a request for an extension of the moratorium on the loans pegged at three months by the Reserve Bank of India (RBI) to around 12 months because of the colossal impact. Although, the distressed industry has received the moratorium for three months it needs at least a one-year moratorium on all the working capital, principal, interest payments, loans as well as the overdrafts.

Mr. JK Mohanty, the co-chairman of Ficci National Tourism Council and secretary under the Hotel Association of India has written to Finance Minister Nirmala Sitharaman that, "The Collateral and interest-free loans of maximum five years for the SMEs (Small & Medium Enterprises) in the tourism industry will be needed to help them sustain throughout this pandemic and rebuild.”


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The Hotel and Travel Industry have also made a suggestion that the GST rates on the hospitality industry must be slashed for a minimum of two to three years. Currently, the large hotels are attracting GST of 12-18 percent based on rates charged on the rooms. The distressed industry suggests that this should be pruned to 5-6 percent with immediate effect.

Some of the other key demands by the hospitality industry are the restoration of Service Exports From India Scheme (SEIS) for duty credit of 10% to the industry of travel and tourism and bringing Aviation Turbine Fuel (ATF) under the ambit of GST so as to provide long-term relief to the airlines, other than offering the rebates on charges such as landing, parking, and housing.

Mr. Mohanty, who is also the chairman of the Hotel & Restaurant Association of Odisha (HRAO) wrote to the finance minister, “The Indian corporates can be encouraged to hold meetings and conferences within India with 200% weighted deduction of them as the tax expenses against the GST invoices. The citizens of India can also be encouraged through the LTA (Leave Travel Allowance) such as the income tax benefits for vacationing within the country. This may be a deductible expense for instance about Rs 1.5 lakh against the GST invoices”,

The HRAO has made a plea to the Odisha State government to waive off the State GST (SGST) until the operations of the hotel industry return back to normal. The salaries of the total staff and the employees account for about 25-30% of the total payout by the hotel owners. HRAO has made a suggestion that the state government should extend the interest-free financial assistance to all the stakeholders for the payment of both the salaries and wages to the employees affected badly. Pay this from the ‘Odisha Labour Welfare Fund’ for a minimum of six months.

Picture Source: The Financial Express, Business Standards, BloombergQuint, ISG

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