One tax, one nation—many problems

All the major travel associations organised dedicated sessions with tax experts and Central Board of Excise and Customs (CBEC) executives to explain and address the working problems and issues that come with the implementation of GST. Heads of these associations here give a consolidated list of the concerns that their members have and which need attention at the earliest.

Pronab Sarkar, President, IATO   

Concerns:

•  Five per cent GST is not on margins but on the package, with different GST for hotels, IGST and SGST, which makes it tax on tax.
• We are involved in a lot of foreign business. For export in GST, goods are exempted and services are not. Rules should be the same for all.
• For outbound, you cannot export the taxes as the place of service is not in India.
• For hotels, there is a lot of confusion if the GST is on the rack rate, published rate or the charged rate.

Suggestions and solutions:

• The five per cent GST should be on margins only. If not taxing on margins, they should treat us under the same rule as for small traders.
• Our services should be deemed as export and should be exempted.
• For hotels, we have asked the government representatives to remove the term ‘5 star’ from the law so that a hotel, when charging `4000, pays 18 per cent GST and the same hotel pays 28 per cent for a room of `10,000.

Guldeep Singh Sahni, India Travel Award winner, and President, OTOAI

Concerns:

• There is no clarity on the GST imposed on tour operators, which, by law, is 5 per cent. However, there is confusion on whether transportation, as mentioned in the law, includes airfare or not.
• Buying from another B2B operator would result in the multiplicity of taxes.
• If we are selling only a hotel and not the entire tour, then we don’t fall under the purview of a tour operator.
• In ticketing, since credit for the air ticket is being directly given to the customer, we have to open our cards and share our client data with the airlines and our business model as well as profit with the customer.

Suggestions and solutions:

• The term transportation under GST should include transfers and providing transport services for sightseeing and not airfare.
• If we are buying from another B2B operator, they should give us input credit.
• The government should come forward to address the concerns and save the industry.
• Since the industry is very vibrant, dialogue is needed with all the segments, like inbound, outbound and ticketing.

P. P. Khanna, President, ADTOI

Concerns:

• If we only sell hotels, it doesn’t make a package and would have 18 per cent GST on it. Even hotels with sightseeing come under the 18 per cent slab.
• Selling a hotel or sightseeing package in any city other than our own city, will not get us input credit. To get the input credit, we need to register in that city.
• On dealing with a local agent, there would be his margin along with 18 per cent GST. The package would become expensive. There would be IGST and SGST as well.
• International Online Tour Operators do not come under the same tax regime, despite selling in India.

Suggestions and solutions:

• A tax regime should be for everyone and needs to be applicable on outside tour operators selling in India as well. MOT needs to take care of this.
• Tour operators are not just doing one thing; there are many components, like passport visa, packages, ticketing, sightseeing, insurance, hotels, guide, etc.
• The tax should be simpli- fied. There is no clarity in the current system. Things need to be smoothened.

Sarabjit Singh, India Travel Award winner, and Vice Chairman, FAITH

Concerns:

• Recommendations on behalf of the industry were made with respect to the limited information available regarding GST by the government. However, the final notifi- cation has many changes.
• For hotels, the GST should have been 18 per cent. For restaurants, 18 per cent GST is higher and should be brought down to 10-12 per cent.

Suggestions and solutions:

• The problem needs to be resolved in 2-3 weeks.
• Five-star hotel is luxury for the person staying there, not otherwise. Hotels are creating business and give a return to the economy. At this juncture, over 50 per cent of tourism infrastructure across the country is unutilised, including convention centres, hotels and transport. The government should look at it and bring a tax regime which makes it competitive internationally

Rajan Sehgal, Chairman, TAAI-NR

Concerns:

• Airlines are asking for the GST number of the client to have the credit generated to the customer.
• Invoicing and billing is posing as the biggest problem to everyone.

Suggestions and solutions:

• Airlines should not raise the GST invoice to the customer as agents have to give all the data of their client to the airline or the consolidator. This would mean sharing our business secrets with the customer.
• A lot of clarity is needed in the next 2-3 weeks, to understand how to go about invoicing.

As told to Nisha Verma