TAAI seeks immediate attention & action on GST rationalizations and TCS in letter to Finance Minister

In a letter drafted to the Union Minister of Finance, Nirmala Sitharaman, Travel Agents Association of India (TAAI) has presented certain important points, which requires Ministry’s prompt attention especially in the upcoming Budget 2022. Speaking on which, Jyoti Mayal, President, TAAI said that the pandemic has created a havoc for the travel trade for nearly two years now with no respite to the members from the government. “As the President of one of the oldest travel associations of India, I would like to bring into notice, inbound tourism business; GST competition internationally: there is a huge gap between what overseas agents charge and what our members - tour operators and travel agents are required to charge.

She further spoke about GST input credits as to how hotels be allowed to charge IGST, which will enable seamless availability of credit across India. "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," she said expressing concerns on various other matters and seeking an immediate action.

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 atleast two years, so as to increase the business and bypass the competition, due to the pandemic concerns, where business has dropped to nearly zero, ” he said.

Talking about the Tax collected at source (TCS) Bettaiah Lokesh, HSG, TAAI commented on some points like ease of doing business, displace 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 mentioned, and due to the 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, we the association once again appeal to abolish TCS.

In the concluding part of the letter, Shreeram Patel, Treasurer, TAAI put forth his views and quoted, "We as an association are fully aligned to the nation’s need of enhancing tax compliance. Ensuring tax compliance on travel can effectively be done through pan cards, Aadhaar cards and passport detail records of the travel booker, as an alternative, which is already being done.

The TAAI office bearers unanimously in the letter addressed to Sitharaman, said that despite the same, if there is still a gap in the tax coverage, they would be happy to discuss a way forward with the Ministry. "This will also help us mutually develop a process, which can lead to resolving multiple queries on this topic. We as an association, seek the Ministry’s immediate attention and action on GST rationalisations and TCS to be withdrawn," the association said.