New Delhi (NVI): The Confederation of Indian Industry (CII) has proposed an action plan aimed at reviving the travel, tourism and the aviation sectors, in the wake of the ongoing coronavirus crisis.
CII has given suggestions for the tourism and hospitality, and the aviation sectors. The recommendations would allow the businesses to sustain their engagements while simultaneously enabling the Central Government to adhere to its fiscal responsibilities and mandates for the fiscal year.
For reviving growth in the tourism and hospitality sector, CII has proposed for a six to nine months’ moratorium on all working capital principle, interest payments on loans and overdrafts bringing in liquidity allowing for business continuity, without categorizing the companies as NPAs.
Apart from this, the trade body has also called for the deferment of GST and advance tax payments at the Central Government level and removal of fees for upcoming licenses, renewal of permits, excise exemption for liquor for the hospitality and travel industry across states.
Furthermore, a 50 per cent reduction in Heat-Light-Power (HLP) costs has been suggested for sustaining businesses.
Amendments in the Export of Services (SEIS) and the Export Promotion Capital Goods (EPCG) have been sought on an urgent basis including the grant of extension in export obligation fulfillment period by an additional three years beyond 6 years, for all the licenses expiring during current and next 2 financial years, without attracting any penalty or interest.
Other actions such as advisory to airlines to not levy cancellation fees and issuance of full refunds or credit notes; deferring the proposed TCS on travel in the Finance Bill 2020; doubling the overdraft facility for the industry and immediate cash relief to avoid mass-layoffs; and financial support under the Mahatma Gandhi National Rural Employment Guarantee Act or a similar scheme to be extended to the entire industry to prevent employment loss; have also been suggested.
For the aviation industry, CII proposes bringing Aviation Turbine Fuel (ATF) under the ambit of GST which would enable full input tax credit on all goods and services and provide long term relief to the airlines.
The industry also seeks rationalization of VAT across states up to 4 per cent as against the existing differential VAT rates across states or locations.
CII has also recommended a 100 per cent waiver on existing air navigation services (ANS) charges for the duration of COVID-19. Rebates on landing, parking and housing charges have also been suggested including a 100 per cent waiver of parking and housing charges for a temporary period of six months.
To provide immediate liquidity to reduce the current financial stress in the sector, CII has also requested the Government to intervene and urge airports to reconsider bank guarantees and security deposits.
As airline costs are substantially impacted by fuel costs, CII proposed extending unsecured interest free credit terms by oil companies to the sector.