Extending the scheme to 150 countries from 43 now is set
to increase tourism inflow, but service tax hike a dampener, industry
experts say
Finance minister Arun Jaitley's proposal in the budget to
extend the visa on arrival facility to 150 countries from 43 at present
in a phased manner is set to increase the tourist inflow and benefit the
local industry manifold, experts said.
Foreign Tourist Arrivals (FTAs) in 2014 reported a growth of 7.1% to
74.62 lakh compared with FTAs of 69.68 lakh in 2013, which was, in turn,
a growth of 5.9% in 2012.
Peter Kerkar, director, Cox & Kings, said, "The extension of
electronic travel authorisation (e-visas) to 150 more countries is a
positive step for tourism as this sector contributes 7% of India's GDP
and helped create more than 40 million jobs last year.''
Hari Nair, founder & CEO, HolidayIQ.com, a travel portal, said,
"Visa on arrival being extended to 150 countries is a huge step for
Indian tourism. In addition, tourism is a sector that is a beneficiary
of improvements across multiple areas. The focus on areas such as
infrastructure, skills development and rural development has the
potential to provide a big tailwind for tourism."
Rakshit Desai, managing director India, FCm Travel Solutions and
Flight Shop, said, "The announcement is a welcome measure. Further, ease
of doing business initiatives like a single clearance window will
foster an environment of business growth and encourage inflow of
investments."
Jaitley also said that the facilities at the country's 25 cultural
world heritage sites were deficient and resources would be provided to
start work such as landscape restoration, signage and interpretation
centres, parking, access for the differently abled, amenities including
security and toilets, illumination and plans for benefiting communities
around them. The heritage sites include churches and convents of old
Goa, Hampi in Karnataka, Leh Palace in Ladakh, Varanasi temple town in
Uttar Pradesh, Kumbalgarh and other hill forts of Rajasthan.
Rajesh Magow, co-founder and CEO-India, MakeMyTrip, said, "Executed
and then marketed rightly, this will undoubtedly attract a new set of
inbound tourists to the country. Investing in local infrastructure will
promote the overall Indian tourism industry."
Neelu Singh, COO, Ezeego1.com, said, "We are happy with the thrust on
domestic and inbound tourism by developing key tourist destinations and
sites and making them more tourist-friendly. It will help draw a lot of
heritage and religious tourists. The government has highlighted the
desire to incentivise cashless transactions which is a positive
development for online sites such as Ezeego1.com."
However, the increase in service tax from 12.36% to 14% will have
negative impact on the industry and is likely to push up the airfares,
feel experts.
Sajid Khan, country manager, India, South African Airways, said, "The
announcements to restore and preserve the 25 cultural world heritage
sites in the country by building visitor amenities is likely to aid
tourism to historical locations. However, inclusion of entertainment
facilities like amusement arcades, theme parks, water parks, concerts,
etc in the negative list for service tax restricts such establishments
from fully reaping the benefits of the growth in tourism. Additionally,
proposed changes to increase service tax rate plus education cess and
secondary and higher education cess to 14% will lead to a hike in air
ticket prices."
Bharat Malkani, president, Hotel and Restaurant Association (Western
India), said, "In the budget 2015-16, the government has proposed the
increase in service tax. According to us, it is an irrational inclusion
in the ever increasing tax list and additional burden on the industry.
This is directly going to impact the customers."
On the other hand, the aviation
sector expected rationalisation of taxes on aviation turbine fuel
(ATF), which ranges between 2% and 40%. While the expectation was dashed
once again, there was also no mention of incentives for development of
maintenance repair and overhaul (MRO), airports and general aviation in
the country.
Captain GR Gopinath
said the budget was a let-down as it has done nothing to make the
Indian aviation sector competitive. "Aviation sector goes hand-in-hand
with railways, roads and shipping. All four are pillars of the economy but the government hasn't treated it as such," he said.
Amber Dubey, partner and India head, aerospace and defence, KPMG, said, "Higher service tax will enhance airfares. Loss of MRO revenue, jobs and taxes to Sri Lanka, Asean
and Gulf countries will continue. Positives include extension of visa
on arrival to 150 counties and development of heritage sites."
Source: http://www.dnaindia.com/india/report-visa-on-arrival-a-game-changer-for-tourism-2065412
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