FAITH suggests 5 measures to GST Fitment Committee for tourism GST rationalisation

Federation of Associations in Indian Tourism & Hospitality (FAITH), the policy federation of all the ten national associations representing the complete tourism, travel and hospitality industry of India -- DTOI, ATOAI, FHRAI, HAI, IATO, ICPB, IHHA, ITTA, TAAI & TAFI, has thanked the Fitment Committee for considering favourably the drawback of taxes on foreign tourists on their goods purchases in India.

They have recommended five rationalisation measures across the tourism, travel and hospitality value chain for consideration for the next GST Council meeting.

*Hotels to be allowed to charge IGST which will enable seamless availability of credit across India to all travel agents and tour operators and will thereby lead to building up a sustainable domestic holiday and meetings and conventions business within the country.

* Tour operators to be enabled a special presumptive GST rate of 1.8 per cent with full GST set-offs. The current rate of 5 per cent without setoffs structurally implies that tour operators have an inbuilt margin of around 27.8 per cent which is an inherently flawed assumption of the prevailing business models. This by default creates an inherent linkage to value addition only and prevents a tax on tax.