A delegation of IATO representatives led by President Rajiv Mehra and Pronab Sarkar, Immediate Past President called on the Finance Minister, Nirmala Sitharaman in her office. While the delegation thanked her for clearing SEIS (Service Export From India Scheme ) for the service providers and recent measures like 5 lakh free e-Tourist Visas for foreign tourists and granting of loan on government guarantee to small tour operators, the delegation made her aware of the several pending issues, which if resolved can lead to revival of tourism in the country.
The delegation impressed on her not just to retain SEIS Scrips’ percentage of 7% which is being given to the tour operators for the last couple of years but raise it to 10 percent. If SEIS cannot be increased it should be retained at 7 percent without consideration of capping of the turnover of the tour operator.
The IATO delegation also discussed with the Hon’ble Minister the cascading effect of multiple GST on the tour operators and requested her to remove this anomaly by charging GST on the deemed total value which could be 10% of gross billing of the tour operators. This will allow the service to be taxed at 18% on 10% mark-up (their fee), which means effective rate of GST on the total package cost will work out to 1.8% of gross billing of the tour operator to his client with no Input Tax Credit.Â
It was also requested that GST/IGST be fully exempted on the services provided outside India i.e. in neighbouring countries even if the package includes India tour as this is causing loss of business for the tour operators. As a result of tax exemption, bookings will come to Indian Tour operators instead of such bookings going to tour operators based in neighbouring countries. This will add considerable foreign exchange for the country.
Another issue that was taken up was levy of Tax Collection at Source (TCS) on sale of overseas tour package and it was requested that TCS should not be made applicable to persons / companies who are non-resident foreign citizens/tourists/foreign tour operators located outside India for purchasing tour packages through an Indian tour operators for outside India specified clearly.
Further the matter of loan under ECLGS was raised requesting to amend the guidelines issued by NCGTC as banks are not entertaining applications of tour operators for availing the ECLGS scheme benefit. It was given to understand that revised guidelines are going to be issued to the Banks. Â
Last and the most important point that was taken up with the Hon’ble Finance Minister was long pending demand of the tourism industry to treat tourism industry as deemed exporter at par with IT Industry under Export of Services based on their foreign exchange earnings by relaxing the parameters/definition of Export of Service and by changing the criteria of place of supply.
The meeting with the Hon’ble Finance Minister was very encouraging and useful and FM promised to look into the issues raised.
