Tourism industry calls for reinstatement of seven per cent SEIS incentive

India’s tourism industry stakeholders have urged the government to continue with the seven per cent Service Export from India Scheme (SEIS) incentives as the travel and tourism industry in the country is facing challenges due to a slowdown in inbound business. The Ministry of Commerce reduced the seven per cent SEIS incentives to five per cent last month.

The Indian Association of Tour Operators (IATO), the apex association of inbound tour operators in the country, has asked the government to reinstate the seven incentives until the new policy is framed in 2020.  The decision to cut the incentive by two per cent across service sectors by the government at a time consultations are taking place for an upward revision has become a cause for concern. Pranab Sarkar, president, IATO said: “We want the same to continue. Without it we cannot survive.”

Rajiv Mehra, vice president of IATO said:  “We understand that the government has reduced it because of the pressure from international agencies like the World Tourism Organisation. But we want it to continue beyond 2020.”

Introduced under the Foreign Trade Policy (FTP) of the government for five years (2015-20) to incentivise service industry and service providers providing services from India to organisations outside India and earn foreign exchange for the country, the key objective behind it was to make such services globally competitive. Under SEIS, the services providers of notified services are incentivised in the form of Duty Credit Scrips on their net foreign exchange earnings. These SEIS scrips are transferrable and can also be used for payment of a number of Central duties/taxes including the basic customs duty.