The tourism industry in Kerala is not expecting any major Kerala-specific announcements in Nirmala Sitharaman's second budget. Nonetheless, the Kerala industry expects some general policy tweaks that would boost tourism in Kerala.
One is of course a demand that has been articulated ever since the Goods and Services Tax regime came into force in 2017: GST refund to foreign tourists. “It is there in the IGST (Integrated Goods and Services Tax) Act, 2017, but has still not been implemented. Under this, a foreign tourist will have to be given a refund of the GST she had paid while purchasing goods and services in India,” a top Tourism official told Onmanorama.
“If this is operationalised, not only will this be a big boost to tourism but it will also pump up the exports of handicrafts, non-precious jewellery, carpets, Ayush and herbal products that are manufactured mostly in Kerala's suburban areas,” the official said.
Zero GST for foreign travellers
One of the industry's most pressing demand, a lowering of GST for hotels, has been met in the middle of the ongoing fiscal. So, the industry is realistic enough to rule out any further cuts.
On September 20, the GST Council had brought hospitality tariffs to the lower slabs. The GST rate for room tariffs of Rs 7,500 and above was reduced to 18 per cent from 28 per cent, while those between Rs 1,000 and Rs 7,500 would have to pay only 12 per cent; earlier, the slab of Rs 2,500-7,500 attracted a prohibitive 18 per cent tax pushing the mid-segment hotels into a major crisis. Hotels with tariffs of less than Rs 1,000 do not attract tax.
Jose Dominic, the CEO of the CGH Earth Group, feels that even with reduced rates room tariffs would remain exorbitant and would continue to rob the industry of the competitiveness it is yearning for. His recommendation: zero GST for stay in hotel rooms for foreign tourists. “Kerala tourism's growth during the 80s and 90s were spurred by foreign tourists. During the last few years the fall in foreign tourist arrival has impacted our growth,” Jose Dominic said.
Extra-budgetary surprises
Certain benefits come outside the Union Budget. The Union Tourism Ministry has this habit of springing surprises outside the Budget. So Jose Dominic is hopeful that, if not in Sitharaman's Budget, the 'Zero GST' proposal could soon become a reality.
Take for instance, the recent ‘Dekho Apna Desh’ programme launched by the Ministry of Tourism. At the two-day National Tourism Conference in Odisha's Konark, Union Tourism Minister Prahlad Singh Patel said: “The tourism ministry will fund the travel expenses of tourists who visit 15 destinations in the country in a year and submit the photos on our website.” It is said Kerala would be one of the biggest beneficiaries of this incentive-linked tourism.
Iconic Kumarakom
There could, however, be some surprises in the Union Budget, too, like last year when Kumarakom was chosen as one of the 17 “Iconic Tourism Sites” that were to be developed into world class tourist destinations. “The Iconic Tourism Sites would enhance visitor experience which would lead to increase visits of both domestic and international tourists at these destinations,” the Union Finance Minister said in her Budget speech.
This is why Kerala's Responsible Tourism Mission coordinator Rupesh Kumar feels that Kumarakom might find a mention in the coming Union Budget. expects the Budget to contain special funds for the first phase of Kumarakom's transformation into an iconic site.
“Picking Kumarakom as an iconic site was a pat in the back for our Responsible Tourism activities. This year we are expecting special funds for the first phase of Kumarakom's transformation into an iconic site, for the preparation of the master plan and other foundational work,” Rupesh said. “In fact, during the Indian Responsible Tourism Conclave held in the presence of union tourism minister Prahlad Singh Patel almost all delegates had called for a more intense focus on responsible and rural tourism. The minister was receptive,” he added.
'Old Wine' demands
Otherwise, the industry is only asking for enhancements of existing benefits and hoping that the finance minister would finally grant what they had been asking for years. E M Najeeb, the president of the Confederation of Kerala Tourism Industry, wants the marketing funds allocated for tour operators to be increased. “We are now coming back from a recession and we need to strengthen our global visibility through road shows and exhibitions,” Najeeb said.
Here is one demand industry leaders like Najeeb had been asking for years: “Introduce group fares for domestic travellers and peg it at least 25 per cent lower than normal fares.”
Yet another demand that had been consistently ignored: “Grant export status to the tourism industry.” “Like the export sector, we too bring in huge foreign exchange to the country. But unfortunately the tourism sector does not enjoy the special treatment accorded to the export sector,” Najeeb said.
