IATO thanks Finance Ministry, GST Council for considering its recommendations

Two of the recommendations by the association were considered favourably during the GST meet

IATO has expressed its gratitude to the Finance Minister, GST Council and the Chairman, CBIC, for favourably considering two of its recommendations in the GST Council meeting held in Chandigarh. In the meeting, the council favoured IATO’s suggestions of removal of GST on services provided outside India to foreign tourists if they take combined package of India and neighbouring countries and GST for the ferry service hired for transport of passengers including tourists used as public transport from point-to-point transport in Andaman & Nicobar Islands.

According to Rajiv Mehra, President, IATO, “We have been recommending to the Ministry of Finance for the last couple of years in our budget recommendations to remove GST on services provided outside India to foreign tourists if they take a combined package of India and outside India. We thank the government for considering our request favourably and clarifying that service provided by Indian tour operators to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration.”

IATO had also requested in its budget recommendation for exemption or reduction of GST on private ferry tickets at Andaman considering that these transport ferries operating in Andaman and Nicobar Islands are not luxury/tourism ferries or cruise but are used as a means of transport, acting as the only source of connectivity between small islands and Port Blair. The government has considered this favourably as well and has clarified that there would be no GST for the ferry service hired for transport of passengers, including tourists, as public transport for point-to-point transfer including in Andaman and Nicobar Islands.

Meanwhile, IATO also urged the government to remove the cascading effect of GST on tour operators, suggesting that tax be charged on deemed value as in the case of Air Travel Agents, where a deemed value of 10% of gross billing of the tour operator may be considered as the taxable value on deemed basis where as it is being charged on gross value for tour operators.

Besides, IATO also suggested a small correction be made in CGST Notification No. 11/2017-CT(R) dated 28.6.2017 (as amended), where a word “and” is required to be replaced by the word “or”. 

IATO is hoping that with these amendments and clarifications, inbound tourism to India would revive faster, helping in regeneration of employment in tourism sector and boosting of foreign exchange earnings for the country.  


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