KAHINI CHAKRABORTY – Mumbai
The travel industry which is struggling with its business in the current market scenario even after the recent hike in service tax from 10 per cent to 12 per cent levied by the Government of India in the Union Budget 2012-13, has been again put to face a weekly-settlement system proposal put forth by IATA, effective June 1, 2012. This recommendation of shifting from the current fortnightly settlement system to weekly payment system was proposed by three Indian carriers namely Air India, Jet Airways, Kingfisher Airlines at the Passenger Agency Conference in October 2011 in Singapore. Besides, the withdrawal of credit card pass through facility, traditionally extended to travel agents is now being withdrawn by Air India.
Various travel trade associations have protested against the move and held talks with officials of the ministry of civil aviation (MoCA), directorate general of civil aviation (DGCA) and ministry of tourism (MoT) on the issue but have had no favourable results so far. The last meeting of the association heads with officials of MoCA, DGCA and MoT was on April 9, 2012.
Iqbal Mulla, president, Travel Agents Association of India (TAAI) said, “If the weekly-settlement system is implemented, then travel agents will be forced to shut shop. We need the government to look at the travel and tourism industry as an important employment generating industry. We urge the airlines to re-consider their decision on the weekly-settlement payment system.”
Sunil Kumar, secretary general, TAAI, informed that would also like to highlight that agents have given a bank guarantee and insurance up to December 31, 2012 and if IATA implements the weekly-settlement system mid-year, it will hit the agents and harm the industry in a big way.
Ajay Prakash, president, Travel Agents Federation of India (TAFI) added, “The industry needs support. Taxation in this segment is high and we need more transparency and accountability. We have sent recommendations to the DGCA and will also approach ministers through our umbrella organisation, Federation of Associations of Indian Tourism & Hospitality (FAITH).”
