TravTalk India Online Magazine
The proposed amendment in Section 206C of the additional tax on remittances made outside India might make outbound tours costlier. The outbound trade fears this would divert customers to OTAs outside India. They explain…
Riaz Munshi, President, OTOAI
“We are going to write to the government about it and try our best to get it withdrawn. Travellers have access to agencies outside India and OTAs based out of India, which will result in the country losing revenue. We need to explain this to the ministry that there is no way we can charge TCS on services provided outside or to suppliers who are outside India. This means double taxation and M!CE will be impacted the most.”
Naveen Kundu, MD, EbixCash Travel & Holidays
“This step is in the right direction, despite many criticising it. However, the negative impact on business would only be temporary. We are in the detox process of the economy and this is how the government can bring people under the tax bracket. For somebody not filing taxes, it shouldn’t be a problem to spend 5% extra. We have to think beyond business to address larger issues. The economy won’t grow if we have a small taxpayer base.”
Mahendra Vakharia, Managing Director, Pathfinders Holidays
“The clause is still unclear as to how it is going to impact outbound trade and who will deduct the amount. Is it going to be charged per person or per booking? There are many questions that need to be clarified. Currently, it is vague, but it does look like a big challenge. It is only increasing the burden on tour operators and shooting up cost unnecessarily.”
Group tours to suffer
Pradip Lulla, Acting President & VP, TAFI
“This amendment would certainly make packages expensive on a global level and affect our business. Hence, we are all writing to the government to get it removed. We are seeking further clarification from our legal advisors because under the Act, the additional tax will cause a lot of issue. Many have said that one can apply for refund of this extra amount; it will be like TDS wherein the tax is cut and one has to claim a refund later. However, the issue is that cash flow will be blocked. Clients may also book directly outside the country. This in turn could lead to unofficial ways of doing business.”
Subhash Goyal, Secy Gen, FAITH
“There is already a five per cent tax on packaged tours and with this one per cent TCS, it will make people buy packages from international DMCs or with online portals. Tour operators and travel agents should not be put at a disadvantage from online portals. They should have the same taxation and there should be a level- playing field between the travel agents and OTAs. If this amendment is implemented, it will obviously discourage international tourism. While the government needs to take the final decision, in my opinion, there should be a level- playing field.”
