Tour operators have urged the government to withdraw the fringe benefit tax and relax guidelines on service tax to lessen "the burden on an industry struggling to take off".

The Indian Association of Tour Operators (IATO), in a pre-budget memorandum to the government, said it was trying to secure exemption of service tax on foreign exchange earnings.

"We have approached the abatement committee of the finance ministry to consider abatement of 90 percent on the package tours."

The association has requested the ministry that service tax be charged on the balance 10 percent, which is the gross mark-up added by the tour operators.

The operators have also sought exemption from being taxed on fringe benefits.

Stating that members visited world markets for marketing Indian tourism products, involving actual expenses that are essential to develop the industry, they added: "In view of this, operators should be exempted from being charged fringe benefit tax (FBT) on their incentives."

"The service tax and FBT not only affect the tour operators but also have a damaging effect on Indian tourism," said IATO president Subhash Goyal.

Benefits similar to those extended to the software and the BPO industry should be extended to tour operators, he added.

Requesting for more support for the tourism industry, the operators have urged the government to reduce duty on air turbine fuel (ATF). It also sought that ATF be classified as "declared goods" so that a standard duty of low quantum can be levied uniformly by all states.

IATO has also sought abolition of dual tariffs and have requested for an increase in plan outlay and bringing tourism into the priority list.

In view of the forthcoming Commonwealth and Asian Games, IATO has come up with a proposal of 'home-stay' programme, with a fixed tariff for foreign tourists.

"We are ready to lend our full support to the government in this regard, provided we get the right kind of cooperation from them," Goyal said.

While the tourism industry, both domestic and foreign, is currently witnessing a boom, the need of the hour should be infrastructure development, he said.