Govt’s plan to offer GST refund to foreign tourists for local shopping will boost industry: FHRAI

Ease of Doing Business for MSMEs: “There is an opportunity here for inbound tourism since the weakened rupee has made India a much cheaper tourist destination for foreign tourists,” said Pradeep Shetty, Joint Secretary, FHRAI.

Govt’s plan to offer GST refund to foreign tourists for local shopping will boost industry: FHRAI
FHRAI also asked for free visas on arrival to encourage international corporates to hold meeting, incentive, conference, and exhibition (MICE) events in the country.

Ease of Doing Business for MSMEs: Hospitality body Federation of Hotel & Restaurant Associations of India (FHRAI), comprising MSMEs and other businesses, has said the government’s plan to offer GST refund to foreign tourists for local shopping will make travel to India competitive and attract more tourists. “While the applicability may be limited to initially involving outlets such as the Cottage Industries Emporium, FHRAI has proposed that the GST refund be extended to all purchases made by foreign tourists in the country,” the association said in a statement. FHRAI also asked for free visas on arrival to encourage international corporates to hold meeting, incentive, conference, and exhibition (MICE) events in the country.

“At a time when inflation is at an all-time high, such initiatives will greatly support the hospitality and tourism industry. Offering free visa on arrival will encourage foreign corporates to organize MICE events in India and help boost the sales of the domestic hospitality business,” said Pradeep Shetty, Joint Secretary, FHRAI. 

Moreover, GST refund to returning foreigners will also prove to be a major incentive to spend more on souvenirs and other items to take back home. Hence, “there is an opportunity here for inbound tourism since the weakened rupee has made India a much cheaper tourist destination for foreign tourists,” said Shetty. 

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According to a report by The Times of India on July 26, 2022, the move is part of a measure that is in the GST law. The Integrated GST Act allows refund on goods to be taken out of the country by a person who is normally not an Indian resident and is in the country for not more than six months for non-immigrant purposes. 

Meanwhile, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday announced approval to Rs 50,000 crore added to the overall ceiling of Rs 4.5 crore of the Emergency Credit Line Guarantee Scheme (ECLGS) dedicated to enterprises in hospitality and related sectors. The Rs 50,000-crore addition was announced by Finance Minister Nirmala Sitharaman in her budget speech this year, expanding the total cover to Rs 5 lakh crore. Moreover, the minister had also announced the extension of the scheme from March 20222 to March 2023.

Also read: Listed SMEs have better profitability ratios, higher return on assets but lower liquidity: RBI paper

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