The Travel and the Hospitality Industry has listed a list of expectations like lessening of tax burden, easing the regulations and creating a holistic tourism infrastructure amongst others. NewsBarons connects with leading travel management companies and online travel portals to compile their demands from the upcoming Budget 2019.
Budget should create a roadmap for ‘One GST Rate’ on accommodation services
Indroneel Dutt, Cleartrip
Today, when India has achieved the position of a fast growing travel market in the world, provisions to ensure that the growth impetus does not hit any infrastructure roadblock is key. The budget should consider supporting India’s digitization journey keeping in mind all slabs including big-ticket transactions like travel.
We hope that this budget will create a roadmap for ‘One GST Rate’ on accommodation services as against four different slabs. Simplification of input credit mechanism on air and accommodation services as well as of GST return filing process will give a further boost to the sector. Further, Airline industry operates with wafer-thin margins, and TCS (Tax collection at source) leads to blockage of working capital and operational difficulties. With the airline industry being one of the most organized and tax compliant sectors, removal of TCS should be considered strongly.
The Air Travel Agent should be outside the purview of TCS
Mahesh Iyer, Thomas Cook (India) Limited
The Travel & Tourism sector is one of the key contributors to the Country’s GDP, and a vibrant tourism industry not only catalyses growth in allied sectors like hospitality and aviation, but also plays a vital role in direct and indirect employment generation. We much appreciate the Government’s tourism focussed initiatives and look forward to a continuum with increased allocation towards schemes like UDAN aimed at enhanced regional connectivity and affordable air travel; the Atal Mission for Rejuvenation and Urban Transformation (AMRUT); Heritage City Development and Augmentation Yojana (HRIDAY); enhancement of the e-Visa initiative to include additional countries, development of new tourism circuits and attractions/experiences, together with strong focus on infrastructure (including airports, road and waterways) and sanitation.
Our wish list also includes 3 key aspects: First that the Air Travel Agent (ATA) should be outside the purview of Tax Collection at Source (TCS). Given that IATA indicates an ATA to be an agent appointed by airlines to sell tickets and that Section 52 of CGST Act specifically excludes agents from the provision of collection of tax at source, however, the FAQ issued by CBIC suggests that travel agents are subject to TCS. Hence, there is an urgent need for clarity on the said issue. Secondly, with reference to eligibility in claiming input tax credit on the tax charged by the airline, we recommend that the proviso to section 16 (2) should be amended to provide for the specific scenario of payment made by corporates or registered passengers to a travel operator. These payments, should be deemed to be payment made to the airline (supplier). This would mitigate the risk of reversal of ITC in case of non-payment to the supplier within 180 days and interest implications thereon. Finally focus on Corporate Tax would also be welcomed: While the Union Budget 2015-16 proposed a reduction in the Corporate Tax from 30% to 25%, the fluctuating slabs decelerated the pace and scale of benefits. Hence, for the FY 2019-20, we look forward to a reduced corporate tax structure of 25% across the board.