Lead Story

Govt considers fiscal incentives for tourism industry

Jyoti Koul - New Delhi

In a bid to give a boost to tourism, the government is considering a host of sops for the tourism industry. As per the proposal given to the Planning Commission to be incorporated in the eleventh plan document, it proposes a regime of fiscal incentives in the form of a 10-year tax holiday from the date of commencement of commercial operations of the hotels, restaurants, tourist complexes, beach resorts, catering and food facilities, travel agencies, tour operators, tourist transport, and units providing facilities for adventure and wildlife experiences.

According to the proposal, only 50 per cent of the profits should be taxed provided the rest is ploughed back into the industry. If this proposal comes through, it will not only bring fresh investments into the industry but also encourage existing service providers. This is primarily to encourage the existing industry to invest further into the tourism industry. This is probably the first time that travel agencies, tour operators and surface transport providers will be given such sops by the government.

The proposal also suggests that the fiscal regime should be devised in a way that it also attracts investment from the non-tourism sector. This should be applicable to hilly areas, rural and places pilgrimage, North East, Sikkim, J&K Uttaranchal and Himachal Pradesh. It also suggests that tourism establishments should also be allowed a tax-free regime for their overseas publicity and promotion and training of the employees in recognised institutions.