Save Tourism and Tour Operators
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Dear Decision Makers
We all were expecting GST to give boon to tourism industry however looking at the proposed rates, it seems that the tourism industry or tour operators will have to look for alternate business. From 1.5% to 9% on hotel bookings w.e.f 22 January, the business already had a dent however in 9% there was provision for CENVAT credit. Now with revised rate of 5% on travel agents and tour operators without any CENVAT CREDIT, industry is going to be ruined.
In our industry, everyone is dependent on other suppliers be it for hotels or transport or cruise or guides and airtickets etc. If at each stage one has to give 5% GST and the input credit is not available, the cost shall ultimately be higher by 15-20%. The wholesale operators and B2B operators shall be ruined due to no CENVAT provision.
Further, any agent operating from Nepal and Bhutan where Indian Rupee is acceptable can sell the package without paying any GST in India and thereby the revenue shall go to neighbouring countries which could have otherwise remained in our country itself. This will also impact inbound operators adversely where in the forex shall go to other countries. If the services are being used by a foreign tourists, this should be exempted from service tax else India can not expect the magic figures of tourist arrivals which all have been waiting for years. 28% tax on hotels above Rs 5000 and no tax on hotels below Rs 1000 shall indicate that India is a destination for low end guests or backpackers thereby quality tourists shall look for alternate destinations. What signal are we giving to the world about fastest growing economy???
With proposed GST rates, it seems govt wish to send a signal to the world that we do not need tourists. Atithi Devo Bhav can only happen if there are Atithi's and that too quality tourists. Forget about foreigners, proposed GST rates even discourage domestic tourists which have been game changer for many states.
Instead of exempting outbound tours (where services are being utilized by the guests overseas) govt has brought it in 5% slab, why would a travel agent book the tour or air ticket through another operator in India if he doesn't get CENVAT credit?
Dear Mr. PM, during your introductory speech after being elected as PM, we as industry had great hopes from you and were expecting you to be a catalyst for Tourism growth however since then we have not seen "acche din" for Tourism industry and with proposed GST rates, that dream has been ruined.
Industry wants you to exempt outbound tours, LTC tours, RELIGIOUS TOURS including Kailash Mansarovar Yatra and give input credit on the services taken from other travel agents, tour operators, transport agents, air booking agents and other service providers related to tourism by keeping GST @ 5% failing which days are not far when you will see industry being dominated by aggregators or overseas operators and thereby huge loss of jobs (direct and indirect) and revenue. It's a time to analyze the same and I? act swiftly as industry has huge hopes from you because only YOU can make a difference!
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