IATO rejoices 5% TCS relief

Association expresses its gratitude to the Ministry of Tourism and Ministry of Finance for the exemption of 5 per cent TCS charged on sale of overseas tour packages to foreign individuals and foreign tour operators (FTOs).

Nisha Verma

IATO has thanked the Government of India for withdrawing completely 5 per cent Tax Collection At Source (TCS) charged on sale of overseas tour packages to foreign individuals and foreign tour operators (FTOs).

Rajiv Mehra, President, IATO, said, “This means that both foreign individuals and FTOs (buyers) buying overseas tour packages from the Indian tour operators will be exempted from TCS provisions.”

Mehra shared that this TCS was earlier withdrawn only for individual foreign tourists but now on IATO’s representation, the government has announced removal of tax, both on individual foreign tourists as well as FTOs. The removal would make the tour packages offered by Indian tour operators to foreigners a bit cheaper and would help provide relief to the travel and tourism sector, which has been severely impacted by the pandemic.

Many foreigners book overseas tour packages for neighbouring countries like Bhutan, Nepal and Maldives through Indian tour operators. Since there was a levy, they preferred booking the tours directly with tour operators in those countries as there was no such charge there.

Sharing how much they worked hard to reach the decision, Mehra said, “When TCS was introduced for all overseas packages, it was applicable to Indians as well as foreign nationals. Now, for Indians, if they paid TCS, they could get that money back when they file the returns. However, for foreign nationals, this was not possible. So, we have been requesting the Ministry of Finance through the Ministry of Tourism, as well as directly that this is wrong and should be removed. Thus, on 30 March 2022, the government issued a notification, partly amending it by saying that if there’s a foreigner booking a tour through an Indian operator, then it will not be applicable, but if it is a foreign tour operator booking then it would still be applicable.”

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