India News | Raise Issue of GST Rates with GOM: FAITH to Tourism Minister

New Delhi, Mar 25 (PTI) FAITH, a policy federation of national associations representing the complete tourism, travel and hospitality industry of India, has written to Union Tourism Minister G Kishan Reddy requesting him to take up the issue of GST rates with the Group of Ministers (GOM) evaluating the tax rates structure.

In its representation, FAITH said that since the industry is just starting to come out of its worst phase, this is the right time to incentivise both tourism demand and tourism supply through rationalisation of GST measures.

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The body requested that hotels be allowed to charge IGST which, it said, will enable seamless availability of credit to all travel agents and tour operators, leading to building up a sustainable domestic holiday and meetings and conventions business within India.

"Tour operators should be enabled a special presumptive GST rate of 1.8 per cent with full GST set-offs. The current rate of 5 per cent without set-offs structurally implies that tour operators have an in-built margin of around 27.8 per cent which is an inherently flawed assumption in the Internet economy.

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"Travel agents should also be allowed the option of exploring the reseller model for charging as they are distribution arms for airlines. This will enable travel agents to structure optimal partnerships according to business requirements between their clients and their airline partners," it said.

It also urged the minister to allow tourist transporters the provision for availing GST set-offs on interstate tourist transport taxes, taxes on parking fees and on taxes on fuel which is their biggest input cost.

"Restaurants should be also allowed the option of charging GST at 12 per cent with full input tax credits and the rate should be delinked from any room tariffs if they are part of hotels.

"GST refund on purchases by foreign tourists to be implemented as already enacted under GST. Tax Refund for Tourists (TRT) Scheme of the IGST Act and its applicability should be ensured across all the product and tourism services availed by them in India. This will prevent India from exporting its taxes on tourism and will increase our global competitiveness," it said.

FAITH also asked the minister to allow tourism, travel and hospitality players to get a refund of any unutilised GST credit lying with state governments which, it said, will enable them to get much needed liquidity.

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