Budget 2019-What Travel Startups Want: Angel tax relief and softer GST rates
Travel startups are facing a big burden in the form of angel tax.
Hopes of a relaxation in angel tax as well as GST rates is doing the rounds again, especially as the Union Budget 2019 deadline nears. As far as the travel startups are concerned, they want freedom from angel tax. Interestingly, government has recently provided various reliefs for startups. However, travel startups are still facing a big burden in the form of angel tax. Not only that, they are also hoping that GST rates get eased as these have taken a toll on their operational expenditure and impacted earnings.
On GST, Rahul Singh, CEO & Co-Founder Ithaka said, "Travel startups bleed to compete with foreign-registered travel companies since GST is not applicable on them. GST adds to their operational expenditure as ticket sizes are big for travel bookings and hence, affect the decision of a traveler in choosing where to buy service from. The government must look into this challenge. Also, global remittance to vendors outside India should be made easier to further promote global companies based out of India. "
Meanwhile, Singh also said, "I also have high hope from this budget vis-a-vis the startup ecosystem and wish for immediate removal of angel tax, which has been haunting both entrepreneurs and investors for a long time. The government should also encourage VCs by reducing the paperwork for funding. "
In February 2019, the government had announced that, a startup will have tax exemption on funds up to Rs 25 crores. Also a startup will be considered as startup uptill 10 years from the date of incorporation or having a capital of Rs 100 crore.
Additionally, Singh also says, "To make our PM's dream a reality, startups should focus on innovation rather than compliances. There should be a single window for all compliances. Also, to boost employee retention and wealth creation of employees, there should be simpler regulations for ESOPs."