Coronavirus: CII urges deferring GST payments for tourism, hospitality industry

Airlines have been hit hard following travel curbs across countries. (Photo:Mint) (MINT_PRINT)

NEW DELHI: The Confederation of Indian Industry (CII) on Friday urged the government to defer goods and advance tax (GST) and advance tax payments, and sought scrapping of fees for licenses, permit renewals, and excise exemption for liquor for the hospitality and travel industry that have been hit hard by the Covid-19 outbreak.

The suggestion was part of the proposed action points, sent to the central government, aimed at revival of travel, tourism, and aviation companies.

For tourism and hospitality sector, CII has proposed a six-nine months’ moratorium on all working capital principle, interest payments on loans and overdrafts, to maintain liquidity allowing for business continuity, without categorising such loans as non-performing assets.

A 50% reduction in Heat-Light-Power (HLP) costs has been mooted for sustaining businesses.

Amendments in Export of Services and Export Promotion of Capital Goods have been sought on an urgent basis, including grant of extension in export obligation fulfillment period by an additional three years beyond the six years, for all licenses expiring during current and next two financial years without attracting any penalty or interest.

Other measures suggested include advising airlines to not levy cancellation fees and issuance of full refunds or credit notes, deferring the proposed tax collected at source on travel in the Finance Bill 2020, doubling 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 job losses.

For the aviation industry, CII has proposed bringing aviation turbine fuel 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. It has also sought rationalization of value added tax across states up to 4% as against the existing differential rates across states or locations.

The industry body has recommended a 100% waiver on existing air navigation services charges for the duration of COVID-19. Rebates on landing, parking and housing charges have also been suggested, including a 100% waiver of parking and housing charges for a period of six months.

To provide immediate liquidity, CII has also urged the government to ask airports to reconsider bank guarantees and security deposits. As airline costs are substantially impacted by fuel costs, it has proposed extending unsecured interest free credit terms by oil companies to the sector.


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