The budget, presented in the state assembly on January 27 by Finance Minister Shri K M Mani, offers several tax concessions to the tourism industry.
The major announcements include a reduction in luxury tax to 5% 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.
The government has also reduced luxury tax on convention centres and auditoriums with a daily rent exceeding Rs 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 tax concessions announced in the Budget will certainly help the tourism industry, which plays an important role in the state's economy," said Kerala Tourism Minister Shri A P Anilkumar.
"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," Shri Anilkumar said while welcoming the announcements in the Budget.
Last week, Kerala Tourism won the United Nations World Tourism Organization (UNWTO)'s 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.
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.
Kerala Tourism Secretary Shri Suman Billa said the concessions would give a huge impetus to the state tourism industry. "Kerala has always been a destination for travel throughout the year. By making luxury tax on hotels and resorts during June-August only 5 per cent, the government is helping the state tourism sector in a big way to promote monsoon travel," he added.
The luxury tax cut for convention centres and auditoriums is expected to directly help the tourism sector in Kerala through MICE (Meetings, Incentives, Conferencing and Exhibitions) tourism, a big money spinner for tourism abroad.
"The reason quoted by many companies for not coming to Kerala for organizing international conference, seminars and conventions was high tax. Now with that reduced, we are expecting a major boost to the sector by attracting more travellers and companies from abroad," Shri Billa said.
While India earns thousands of crores of rupees in foreign exchange by hosting international conferences and conventions, the share of Kerala in this sector is meagre. Abroad, the MICE tourism is a vital element of tourism policy of countries.
The luxury cut for convention centres will be applicable only for meetings and conventions approved by Kerala Tourism.
"We are grateful to the government for its whole-hearted support to the tourism sector, which is a very important industry of Kerala," Shri Billa said.