IATO Execs Face to Face with India Government

Today, Mr. Rajiv Mehra, President, and Mr. Pronab Sarkar, Immediate Past President, of the Indian Association of Tour Operators (IATO), the national apex body of tour operators, called on the Hon. Finance Minister, Mrs. Nirmala Sitharaman, in her office.

  1. The IATO representatives met to thank her for clearing the Service Exports from India Scheme (SEIS) for the service providers.
  2. Additionally they thanked her for the 5 lakh free e-Tourist Visas for foreign tourists, and for granting loans and to seek more support from the government for the revival of tourism and to resolve pending issues.
  3. This will greatly help the Indian tour operators to compete with neighboring countries to attract more tourists to India.

The issues that were raised with the Hon. Minister were to retain SEIS Scrips percentage of 7 percent which has been given to the tour operators for last couple of years. They mentioned that IATO has been requesting to increase the percentage to 10 percent, and it should be retained to 7 percent if it cannot be increased. They also said there should not be any capping, and SEIS to tour operators should be released without any compromise on the percentage.

They also discussed with the Hon. Minister the cascading effect of the Goods and Services Tax (GST) on tour operators and requested to remove this anomaly by charging GST on the deemed value which could be 10 percent of gross billing of the tour operators. This will allow the service to be taxed at 18 percent on a 10 percent mark-up, which means an effective rate of GST on the total package cost will work out to 1.8 percent of gross billing of the tour operator to his client with no Input Tax Credit (ITC). It was also requested that GST and Integrated Goods and Services Tax (IGST) be fully exempted on the services provided outside India, i.e., in neighboring countries even if the package includes an India tour, as this is causing loss of business for tour operators. As a result of tax exemption, bookings will come to India 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 sale of overseas tour packages. It was requested that TCS should not be made applicable to persons or companies who are non-resident foreign citizens, tourists, or foreign tour operators located outside India for purchasing tour packages through an Indian tour operator for outside India.

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