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TAAI demands GST rationalisation and TCS abolition for travel trade

By FnF Correspondent | PUBLISHED: 27, Jan 2022, 20:11 pm IST | UPDATED: 27, Jan 2022, 20:18 pm IST

TAAI demands GST rationalisation and TCS abolition for travel trade New Delhi: In its communications with Union Minister of Finance, Nirmala Sitharaman, Travel Agents Association of India (TAAI) has presented certain important points, which requires the Ministry's prompt attention especially in the upcoming Budget for Focus 2022.

Speaking on the issue, Jyoti Mayal, President, TAAI said that the pandemic has created havoc for the travel trade for nearly two years now with no respite to the members from the government. “As the President of the largest travel Associations in India, we would like to bring into attention, inbound and domestic tourism business; competition faced internationally, due to GST: there is a huge gap between what overseas agents charge and what our members - tour operators and travel agents, are required to charge to overseas customers and domestic travellers.

She further updated on GST input credits, as hotels and other services are allowed to charge IGST, which should enable seamless availability of credit across states for travel agents and tour operators. Additionally, "Tour operators to be enabled a special presumptive GST rate of 1.8 per cent with full GST setoffs, travel agents to be allowed the option of exploring the reseller model for charging on airline tickets," she said expressing concerns on various other matters and seeking immediate intervention.

Adding to which Jay Bhatia, VP, TAAI, further said that tourist transporters should also be allowed the provision for availing GST setoffs on the interstate tourist transport taxes, taxes on parking fees and taxes on fuel which is their biggest input costs. “GST on travel and tourism-related services must be given a Tax Holiday for at least Two Years, so as to increase the business and bypass the competition, due to the pandemic concerns, where the business has dropped to nearly zero,” he said.

Talking about the Tax Collected at Source (TCS), Bettaiah Lokesh, HSG, TAAI commented that ease of doing business, displacing business from Indian travel companies to companies out of India, removing the safety net from Indian travellers and further explained other points as well with their cons and pros. He added that under the points addressed to the FM, TCS is a waste of time in ensuring compliances, loss in business due to inflated pricing due to GST and TCS, deviation of business from TAAI members to online companies and other travel agents overseas. So as to check the enhancement in business such taxes would be a hindrance to the growth of the economy as a whole. TAAI reteriates its appeals to abolish TCS.

Shreeram Patel, Treasurer, TAAI put forth the views and quoted, "We as an association are fully aligned to the nation’s need of enhancing tax compliance. Ensuring tax compliance on travel is effectively done through pan cards, which are being recorded for remittances. Aadhaar cards and passport detail records of the traveller."

TAAI office bearers have volunteered that they would be happy to discuss a way forward with the Finance Minister. "This will also help us mutually develop a solution, which can lead to positive growth along with ease of doing business, enabling overall economic growth for India's Travel & Tourism which until last year has contributed over 11% of India's GDP. TAAI, as the Nodal Association, appeals for the Finance Minister's personal and immediate attention for action on GST Rationalisation and TCS Abolishment," the Association said.