TAX CONCESSIONS TO TOURISM
The Government has granted a number of tax concessions
to tourism as rationalisation of the taxes on services in the
tourism sector would make India, price-wise a more competitive
destination. Concessions granted in the Budget for the year 2002-2003
are as follows :-
- Exemption of Air Travel Tax on air travel from and to North-East,
Andaman & Nicobar Islands, Lakshadweep and Leh.
- Service tax exemption given earlier to be extended for one
more year : in cases of functions and banquets where the entire
bill is for catering services no service tax would be charged.
- Expenditure Tax on hotels henceforth to apply only to room
charges : Earlier Expenditure Tax was charged on room charges
as well as other services.
- Threshold of Rs. 2000 raised to Rs. 3000 for levy of Expenditure
Tax.
- Disparities between section 80 HHC and 80 HHD removed : (Under
section 80 HHC the exemption is for 100 per cent of the total
foreign exchange earnings. But the hotels under 80 HHD it was
50 per cent and the balance 50 per cent was exempted if it was
kept in a reserve ad used for specified purposes. Now this disparity
stands removed); Also the phasing out of the benefits was inferior
for hotels industry as compared to other exporter units under
80 HHC.
- Deduction of 50 per cent of profits earned by units setting
up convention centres will be allowed for 5 years under section
80-IB; This will help in those entrepreneurs who are setting
up new convention centres.
- Customs Duty on imported liquor reduced from 210 per cent
to 182 per cent.
- TDS under section 194 H reduced from 10 per cent to 5 per
cent. This would benefit the hotels as well as travel and tour
operators.
- The need for rationalisation of taxes levied by the State
Governments have also been taken up with them through the Inter
State Council and other fora.
This information was given by the Minister of
Tourism and Culture, Shri Jagmohan in a written reply to Shri
C. Ramachandraiah in the Rajya Sabha today.
