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IATO Welcomes GST Exemption on Services to Foreign Tourists and Ferry Services

Indian Association of Tour Operators (IATO) expresses its gratitude to the Finance Minister,  GST Council and the Chairman CBIC for favourably considering  two of its recommendations- removal of, GST on services provided outside India to foreign tourists if they take combined package of India and neighbouring countries and  secondly GST for the ferry service hired for transport of passengers including tourists used as public transport from point to point transport in Andaman & Nicobar Islands,  in the GST Council meeting held in Chandigarh.

“We have been recommending to the Ministry of Finance for the last couple of years in our budget recommendations to remove GST on services provided outside India to foreign tourists if they take a combined package of India and outside India. We thank the government for considering our request favourably and giving a clarification that “Service provided by Indian Tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration,” Rajiv Mehra, President, IATO, said.  

IATO had also requested in its budget recommendation for exemption or reducing GST on private ferry tickets at Andaman considering that these transport ferries operating in Andaman and Nicobar Islands are not luxury / tourism ferries or cruise, but they are used as means of transport and is only source of connectivity between small islands and Port Blair. The government has considered this too favourably and clarified that there would be no GST for the ferry service hired for transport of passengers including tourists used as public transport from point-to-point transport including in Andaman & Nicobar Islands.

While IATO expresses its sincere thanks for the relief provided, it also urges government to remove cascading effect of GST on tour operators and GST on tour operators be charged on deemed value as in the case of Air Travel Agents, where a deemed value of 10% of gross billing of the tour operator may be considered as the taxable value on deemed basis whereas it is being charged on gross value for tour operators.

Besides this there is a small correction needed in CGST Notification No. 11/2017-CT(R) dated 28.6.2017 (as amended), where a word “and” is required to be replaced by the word “or”.

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