Raise tourism GST concerns with Group of Ministers, says FAITH

Raise tourism GST concerns with Group of Ministers, says FAITH

AgenciesUpdated: Thursday, February 24, 2022, 03:31 PM IST
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FAITH mentioned that since the Indian tourism, travel, and hospitality industry is just starting to come out of its worst phase, this is the right time to incentivize both tourism demand and tourism supply through the rationalization of GST measures. / Representative Photo |

FAITH the policy federation of all the national associations representing the complete tourism, travel and hospitality industry of India (ADTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI, TAFI) has requested Tourism Minister to take up the GST rates issue of tourism, travel & hospitality with the Group of Ministers (GOM) evaluating the entire GST rates structure.

FAITH mentioned that since the Indian tourism, travel and hospitality industry is just starting to come out of its worst phase, this is the right time to incentivise both tourism demand and tourism supply through rationalisation of GST measures.

The following top concerns have been highlighted.

- Hotels to be allowed to charge IGST which will enable seamless availability of credit across India to all travel agents and tour operators and will thereby lead to building up a sustainable domestic holiday and meetings and conventions business within the country.

- Tour operators to be enabled a special presumptive GST rate of 1.8 per cent with full GST setoffs. The current rate of 5 per cent without setoffs structurally implies that tour operators have an inbuilt margin of around 27.8 per cent which is an inherently flawed assumption in the internet economy.

- Travel Agents be also allowed the option of exploring the reseller model for charging as they are distribution arms for airlines. This option will enable travel agents to structure optimal partnerships as per their business requirements between their clients and their airline partners.

- Tourist transporters be allowed the provision for availing GST setoffs on interstate Tourist transport taxes, taxes on parking fees and on taxes on fuel which is their biggest input costs.

- Restaurants should be also allowed the option of charging GST at 12 per cent with full Input tax credits and the rate should be delinked from any room tariffs if they are part of hotels.

- GST refund on purchases by foreign tourists to be implemented as already enacted under GST.

- Tax Refund for Tourists (TRT) Scheme of the IGST Act and its applicability should be ensured across all the product and tourism services availed by them in India. This will prevent India from exporting its taxes on tourism and will increase our global competitiveness in world tourism.

- Tourism, travel & hospitality players must be allowed to get a refund of any unutilised GST credit lying with state governments which will enable them to get much needed liquidity.

FAITH said that these rationalisation measures will provide a stepping stone for the Indian tourism travel and hospitality industry once it attempts its multi-year journey back to recovery.

(With inputs from IANS)

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