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FAITH to push IGST & rationalisation of taxes for accommodation sector with GST Council

Monday, January 22, 2018, 13:00 Hrs  [IST]
HBI Staff| New Delhi

Having accepted two major recommendations of FAITH by the GST Council at its 25th sitting recently, the umbrella body of the travel, tourism and hospitality industry, will be pushing for resolution of their other demands with the Council now. FAITH has identified nine major demands to be pursued with the Ministry of Finance as part of the Union budget as well as the GST Council.

FAITH wants IGST be made available for immovable properties for tourism accommodation such as for hotels, cruises, campsites & for restaurants. Other demands of the Association include, zero rating or a special rating of 5% on foreign exchange earnings in tourism services treating it part of exports, consider transaction value for the rate categorisation of hotels, rationalisation of GST at 18% for luxury hotels above INR 7,500 tariff; an option to discharge under presumptive model maybe extended to travel agents, tour operators who are booking hotel accommodation/ any other tourism products/ tour packages (1.8% for B2C & 0.9% for B2B); GST exemption for outbound travel services; special provision & services account code for adventure tour operators, etc. 

FAITH in a statement has expressed gratitude to the government for addressing “two more bottlenecks” at the last GST Council meeting. Tour operators to tour operator GST credit have been now allowed at a special GST rate of 5%. This will prevent tax on tax in the tourism distribution   value chain. The GST Council has also brought down the GST on elephant rides, camel rides, amusement parks, joy rides from 28% to 18%. But since elephant rides and camel rides are being provided by people who are below the GST threshold of INR 20 lakhs, they will be automatically exempt from the GST.  

FAITH had made 9 recommendations to the GST Council and also in the pre-budget meeting with the Finance Minister. “To push through the remaining recommendations, FAITH and its member associations will keep on engaging with the central and state policy-makers to hone in the realisation that a strategic GST regime is very critical for competitiveness of our tourism & hospitality industry and consequently for higher employment in India,”  FAITH statement says.

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