Exporter Status For Tour Operators

In a cabinet note, the tourism ministry has proposed that tour operators be accorded the status of exporters. The note, prepared in consultation with the commerce ministry, elaborates the benefits which would accrure to the tour operators who are a part of the tourism industry and instrumental in getting foreign exchange. Tourism minister Madan Lal Khurana recently told Business Standard that both he and the commerce minister had agreed "in principle" on the proposal. Sources in the ministry said the note would be put up before the cabinet soon.

President of Indian Association of Tour Operators (IATO), Subhash Goyal, welcomed the move saying, "It has been our demand for quite some time now."

Once given the `exporter' status, tour operators would get income tax benefits under 80HHC and would also become a member in the proposed tourism Export Promotion Council _- a difficult proposition for tour operators otherwise.

In June the IATO had written to commerce minister Ramakrishna Hegde saying, "Unfortunately we have been concentrating single mindedly on earning of foreign exchange through export of goods only, whereas we could always earn foreign exchange in a big way through the export of services had tourism been given full thrust and impetus."

IATO, in its letter to Hegde, had stated that if tourism was given the staus of an export industry, it would help tour operators to be more competitive in the international market, particularly with the neigbouring countries, which would go a long way in solving the much-needed problem of foreign exchange which the country needs. The government in recent times has been concentrating on giving sops to the tourism industry. In a notificiation issued the government exempted the hotel industry from counter-vailing duty levied at the rate of 10 per cent on zero duty under EPCG scheme. The notification stated , amongst other things, "Rendering services by hotel industry, such goods shall be exempt from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act."