FM hears tourism woes

Rajiv Mehra, President, IATO and Pronab Sarkar, Immediate Past President, IATO, recently met the finance minister to thank her for recent relief announcements and sought support from the government on issues like SEIS, TCS, ECLGS and export industry status.

Manas Dwivedi

Rajiv Mehra and Pronab Sarkar met Finance Minister Nirmala Sitharaman in her office to thank her for the recent announcements for revival of tourism and also to seek support from the government on issues related to SEIS, TCS, GST, ECLGS and export industry status. The delegation expressed gratitude to Sitharaman for clearing SEIS for service providers, announcing five lakh free e-tourist visas, and granting loan for tourism service providers. The team sought more support from the government for revival of tourism and to resolve pending issues that could help Indian tour operators compete with neighbouring countries to attract more tourists to India.

The issues that were raised were to retain SEIS Scrips percentage of 7 per cent, which is being given to tour operators for the last couple of years. The delegation also mentioned that IATO had been requesting an increase in the percentage to 10 per cent, but should be retained at 7 per cent if it cannot be increased. They also requested that there not be any capping, and SEIS to tour operators be released without any compromise on the percentage.

The delegation also discussed the cascading effect of GST on tour operators and requested to remove this anomaly by charging GST on the deemed value which could be 10 per cent of gross billing of the tour operators. “This will allow the service to be taxed at 18 per cent on 10 per cent mark-up, which means effective rate of GST on the total package cost will work out to 1.8 per cent of gross billing of the tour operator to his client with no ITC. It was also requested that GST/IGST be fully exempted on the services provided outside India, i.e. in neighbouring countries, even if package include 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,” Mehra said.

It was also requested that TCS 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 operator for outside India. Mehra added that the matter of loan under ECLGS was also raised, requesting to amend the guidelines issued by NCGTC.

“Another point was to treat tourism industry as deemed exporter at par with IT industry under Export of Services based on their foreign exchange earnings by relaxing parameters,” Mehra concluded.