They have urged the Union Finance Minister to moot proposal at GST council meet to consider lowering GST for battered tourism sector

While no sector of the economy has escaped the impact of Covid-19, among the worst hit is the tourism sector, particularly the inbound one with more than one year of complete washout and no immediate revival in sight. 

In the light of the current situation, Indian Association of Tour Operators (IATO) has written to the Union Finance Minister urging it to use its wherewithal at the upcoming GST council meeting and ask the council to consider rationalisation or lowering of GST on various tourism related services as this will help boost the sector as and when the revival happens.   

IATO mentions in the letter that GST on Tourism services in India is more than double as compared to the neighbouring countries and that places them at huge disadvantage. In order to compete, GST rates on tour operators need to be rationalised. Specifically, IATO requests the council to consider charging GST on tour operators on 10 per cent of the service charged or 1.8 per cent of gross billing of the tour operator as compared to present 5 per cent. 

Rajiv Mehra, President, IATO, says, “The inbound tourism has been the worst hit and if we were to get these financial relief it will help us give us some strength to bounce back. Sincerely hope that our requests will be given serious consideration by the GST council.”

In the letter, IATO has also requested that GST/IGST may be fully exempted on the services provided outside India -.in neighbouring countries even if the package includes India tour. 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.

The letter also reiterated a long standing demand to change the definition of export of services and the criteria of place of supply based on performance of services and accord Tourism industry status of deemed exporter at par with IT Industry.