GST regime: Kerala Travel Mart calls for tax cut in tourism sector

Kerala Travel Mart (KTM) Society, a leading tourism body, has expressed concern over high rates of taxation under the GST regime, saying it would stifle the tourism business in the country by making it unsustainable and drive away foreign tourists to destinations other than India.

A KTM delegation, led by President Abraham George along with KV Thomas, MP, held meetings with Union Tourism Minister Mahesh Sharma, Tourism Secretary Rashmi Sharma, the GST Council Chairperson and officials of the Union Finance Ministry and GST Council, drawing their attention to the serious anomalies in the GST, which would throw the tourism industry into a major crisis.

There is almost a 19 per cent tax hike for an Indian product after the implementation of GST, George said and urged the Centre to address the issue urgently.

The industry is already under stress following demonetisation and liquor ban on highways, he said, adding that the implementation of GST is adversely impacting the business.

KTM has also sent a memorandum to Union Finance Minister Arun Jaitley, pointing out that that ‘the new GST structure is the highest in the world’ and is ‘seriously affecting the sustainability of the tourism business.’

In the memorandum, the KTM president appealed to reduce the tax for hotels from 28 per cent to 18 per cent, substantially bring down the tax on houseboats and declare tax holiday for inbound travellers. In the pre-GST regime, hotels were charging 19 per cent tax on rooms. George said the tax has been to the tune of 38 per cent on tour packages for domestic travellers and 33 per cent for international tourists, clubbing the hotel tax with tour operators.

The high tax of 28 per cent plus the tour operator’s tax of five per cent is costing a foreign traveller hotel tariff of 33 per cent whereas the average tax rate in foreign countries is between 7 and 17 per cent, he said.

The KTM, which has members from hotels, resorts, houseboats, home stays and tour operators, also demanded bringing down the GST on houseboats from 28 per cent to earlier tax rate of five per cent, saying the high rate of taxation would adversely impact this unique industry of Kerala that employs a large number of people.