Budget Impact on Tourism Sector
Overall impact: Positive
In Budget 2002-03, the Finance Minister has recognised
tourism as a priority area due to its beneficial impact on employment, foreign
exchange earnings and national integration. The announcements made by the Finance
Minister will have a positive impact on the fortunes of the sector.
Plan Outlay for tourism has been increased by 50%
to Rs. 2,250 million.
A Comprehensive Tourism Development Package will
be implemented in the following manner: -
- 6 tourism circuits will be brought on par with
international standards.
- Special purpose vehicles have been permitted
to raise resources from both private and public sectors for infrastructure
development in these circuits.
- Hampi will be developed as an international
tourism destination.
Overall deduction available under
80HHD of the Income Tax Act in respect of foreign exchange earning of hotels
& tour operators has been increased to 50% from 40% for assessment year
2003-04 and to 30% from 20% for assessment year 2004-05.
Services provided by hotels have been exempted
from service tax up to 31-Mar-03.
Threshold limit for applicability of expenditure
tax has been increased from room charges of Rs 2,000 per day to room charges
of Rs 3,000 per day with effect from 01-Jun-02.
Air travel tax has been exempted for travel to
and from North-Eastern States. This is currently exempt for travel within North-Eastern
States.
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