Mr. Rajiv Mehra President and Mr. Pronab Sarkar, Immediate Past President of Indian Association of Tour Operators (IATO), the National Apex Body of Tour Operators, called on the Hon’ble Finance Minister Mrs. Nirmala Sitharaman in her office today to thank her for a) clearing SEIS for the service providers; b) 5 lakh free e-Tourist Visas for foreign tourists; c) granting loan and to seek more support from the Government for the revival of tourism and to resolve pending issues, which will help the Indian tour operators to compete with our neighboring countries to attract more tourists to India.
The issues that were raised with the Hon’ble Minister were to retain the SEIS Scrips percentage of 7% which is being given to the tour operators for the last couple of years. They mentioned that IATO has been requesting to increase the percentage to 10% and it should be retained to 7 % if it cannot be increased and also there should not be any capping and SEIS to tour operators are released without any compromise on the percentage.
They also discussed with the Hon’ble Minister the cascading effect of GST on the tour operators and requested to remove this anomaly by charging GST on the deemed value which could be 10% of the gross billing of the tour operators. This will allow the service to be taxed at 18% on a 10% mark-up, which means the effective rate of GST on the total package cost will work out to 1.8% 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 neighboring countries even if the package includes India tours 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 neighboring countries. This will add considerable foreign exchange for the country.
Another issue that was taken up was the levy of Tax Collection at Source (TCS) on the sale of overseas tour package and it was requested that TCS should 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 Indian tour operators for outside India specified clearly.
The matter of loan under ECLGS was raised requesting to amend the guidelines issue by NCGTC as banks are not the entertaining application of tour operators for availing the ECLGS scheme benefit. It was given to understand that revised guidelines are going to be issued to the Banks.
Last and the most important point that was taken up with the Hon’ble Finance Minister was long pending demand of the tourism industry to treat tourism industry as a deemed exporter at par with IT Industry under Export of Services based on their foreign exchange earnings by relaxing the parameters/definition of Export of Service and by changing the criteria of the place of supply.