Kerala announces major tax concessions for tourism in budget 2014

FE Online Posted online: Thursday, Jan 30, 2014 at 0000 hrs
Mumbai : Kerala is poised to become a ‘round-the-year destination’ for travellers and an important centre for international conferences with the Kerala government announcing major tax concessions for the state tourism industry in the state budget 2014. The budget, presented in the state assembly on January 27, 2014 by finance minister K M Mani, offers several tax concessions to the tourism industry. The major announcement includes a reduction in luxury tax to five per cent on hotels from June to August to promote off-season tourism. The step is expected to help reduce tariff in hotels and resorts in the state's major backwater and hill destinations.

AP Anilkumar, tourism minister, Kerala, said, “The tax concessions announced in the budget will certainly help the tourism industry, which plays an important role in the state’s economy. The concessions will give a new fillip to the tourism industry in Kerala and help the state discover new avenues of growth for the important sector, which has received several international awards and recognitions.”

The government has also reduced luxury tax on convention centres and auditoriums with a daily rent exceeding INR 20,000 to 10 per cent from the existing 20 per cent, in a bid to promote MICE tourism, a niche category for facilitating national and international conferences, conventions and seminars. Other announcements for the tourism industry relate to substantial increase in allocation for marketing destinations and implementing special tourism projects. The cut in luxury tax in the off-season is expected to increase the number of tourists arriving in Kerala during the off-season months from June to August.

Suman Billa, secretary, Kerala Tourism, said, “Kerala has always been a destination for travel throughout the year. By making luxury tax on hotels and resorts during June-August only five per cent, the government is helping the state tourism sector in a big way to promote monsoon travel.”

The luxury tax cut for convention centres and auditoriums is expected to directly help the tourism sector in Kerala through MICE tourism will be a big money spinner for tourism abroad.

Billa added, “The reason quoted by many companies for not coming to Kerala for organising international conference, seminars and conventions was high tax. Now with the reduced, we are expecting a major boost to the sector by attracting more travellers and companies from abroad.”

Last week, Kerala Tourism won the United Nations World Tourism Organisation's (UNWTO) Ulysses Award for Innovation in recognition of the department’s initiatives in ‘Responsible Tourism’ unveiled in Kumarakom, a famous backwaters destination. It is the first such award from UNWTO to an Indian tourism board.