Ahead of Union Budget 2024-2025, India’s travel, hospitality, and aviation sectors have pushed for reforms on fronts like Tax Collected at Source and Aviation Turbine Fuel. Industry players also advocated visa-free entry to neighbouring countries and enhanced promotion of Indian destinations abroad.

However, the expectations are tempered as the industry is not realistically expecting any substantive announcement in the interim Budget ahead of the elections. 

Acknowleding that it is an interm Budget, Jyoti Mayal, President of TAAI, said: “We are hopeful for a standardisation of Tax Collected at Source (TCS) at five per cent on foreign travel packages, as opposed to the current slabs of five per cent and 20 per cent.”

A concern voiced by industry players is the disparity in Tax Collected at Source (TCS) regulations for Online Travel Agencies (OTAs). Stakeholders said that there was a need to level the playing field, highlighting the disadvantage faced by domestic OTAs compared to their foreign counterparts.

“The absence of GST credit for hotel construction in India presents a significant hurdle in the growth of the nation’s hospitality sector,” says Rajesh Magow, co-founder & Group CEO, MakeMyTrip. Industry players unanimously also sought a rationalisation of GST rates and credit allowances to enhance the affordability of accommodations, attract more tourists, and stimulate further investment in the sector.

Beyond these longstanding issues, industry stakeholders are calling for comprehensive reforms and strategic initiatives. Balasubramanian A, Vice-President, TeamLease Services, emphasises the potential impact of encouraging domestic tourism through initiatives like Swadesh Darshan and infrastructure development. He believes these measures could contribute significantly to the sector, fostering job creation and injecting ₹10,000-15,000 crore into the economy.

MakeMyTrip suggests learning from neighboring countries and implementing visa-free entry for tourists from India’s top fifteen feeder markets. “This initiative will not only put India on a competitive footing in the global tourism market but also foster a reciprocal environment,” said Rajesh Magow.

Meanwhile Aloke Bajpai, Co-founder & Group CEO of ixigo, highlighted the rising trend of domestic air travel from tier 2, 3, and 4 cities. He hopes for continued budgetary support for the development of infrastructure, technology, and safety measures under the UDAN scheme, stressing the crucial role of domestic air travel in fostering growth in the aviation sector.

JetSetGo Aviation, led by founder Kanika Tekriwal,  has sought clarity on customs issues faced by Non-Scheduled Operators and clear guidelines on custom duty in sale and leaseback transactions involving Gift City companies. The company also urges the inclusion of aviation fuel under GST for enhanced operational efficiency.