Thursday, August 18, 2022

Tourism industry disappointed with GST Council decision

Some of the long-pending demands especially with regard to the cascading effect of taxes on the sector would be removed at the 47th GST Council meeting

PRAVASISAMWAD.COM

The tourism body had asked for relief from GST but in the recent GST Council meeting at Chandigarh, it was given only a small relief.

The trade and industry associations which made elaborate presentations on each issue to the departments concerned in the last few months were confident that some of the long-pending demands especially with regard to the cascading effect of taxes on the sector would be removed at the 47th GST Council meeting. That did not happen.

Also, the GST Council decided to bring hotels and accommodation units with up to INR 1000 tariff into the GST net with 12 per cent GST. Earlier, hotels and hospitality units having tariffs below INR 1000 had zero GST. With this, all rooms up to INR 7500 room tariff will invite a uniform GST of 12 per cent

The only relief that the Council considered positively and allowed, reported ETTravelWorld was the services provided by Indian tour operators to a foreign resident for a tour partially in India and partially outside India. In such cases, the tax would be proportionate to the tour conducted in India for such foreign tourists, with the condition that the concession does not exceed half of the tour duration.

Also, the GST Council decided to bring hotels and accommodation units with up to INR 1000 tariff into the GST net with 12 per cent GST. Earlier, hotels and hospitality units having tariffs below INR 1000 had zero GST. With this, all rooms up to INR 7500 room tariff will invite a uniform GST of 12 per cent.

The GST Council also decided to keep the exemption on transport of passengers by air to and from the North East states and Bagdogra to only the economy class passengers.

Ashish Gupta, Acting CEO, Federation of Association of Indian Tourism & Hospitality (FAITH), the umbrella body of trade associations, said that matters which were critical to the survival, as well as the competitiveness of the sector, were not considered by the Council. The current GST rate of 5 per cent without set-offs implies that tour operators have an inbuilt margin of around 28 per cent in every package they sell. Considering it as value addition, the industry asked it to be brought down to 1.5 to 1.8 per cent, he said.

The tourism industry also wanted the GST on room tariffs to be at a uniform rate of 12 per cent but it was not allowed. Gupta said that the industry federation has also lobbied for restaurants to be delinked from the hotels and given the option to choose 5 per cent without set off, and 12 per cent with set off, under the GST system. “We will continue to pursue our case with the fitment committees of the Council on all these issues,” he said.

******************************************************

Readers

These are extraordinary times. All of us have to rely on high-impact, trustworthy journalism. And this is especially true of the Indian Diaspora. Members of the Indian community overseas cannot be fed with inaccurate news.

Pravasi Samwad is a venture that has no shareholders. It is the result of an impassioned initiative of a handful of Indian journalists spread around the world.  We have taken the small step forward with the pledge to provide news with accuracy, free from political and commercial influence. Our aim is to keep you, our readers, informed about developments at ‘home’ and across the world that affect you.

Please help us to keep our journalism independent and free.

In these difficult times, to run a news website requires finances. While every contribution, big or small, will makes a difference, we request our readers to put us in touch with advertisers worldwide. It will be a great help.

For more information: pravasisamwad00@gmail.com

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

EDITOR'S CHOICE