IATO thanks the Ministry of Finance and the GST Council for considering its recommendations

Two of the association’s recommendations were considered favorably during the GST meeting


The IATO expressed its gratitude to the Minister of Finance of the GST Council and the Chairman of the CBIC for favorably considering two of its recommendations at the GST Council meeting held in Chandigarh. At the meeting, the council favored IATO’s suggestions to remove GST on services provided outside India to foreign tourists if they take a combined package from India and neighboring countries and GST for leased ferry service for transporting passengers including tourists used as public transport from point-to-point transport in the Andaman and Nicobar Islands.

According to Rajiv Mehra, President of IATO, “We have recommended to the Ministry of Finance for the past two years in our budget recommendations to remove the GST on services provided outside India to foreign tourists if they are taking a combined tour package from India and outside India.We thank the government for considering our request favorably and clarifying that the service provided by Indian tour operators to a foreign resident for a tour partly within India and partly outside India. of India shall be subject to a tax proportional to the circuit made in India for this foreign tourist subject, provided that this concession does not exceed half of the duration of the tour.

The IATO had also requested in its budget a recommendation to exempt or reduce GST on private ferry tickets in Andaman, considering that these transport ferries operating in the Andaman and Nicobar Islands are not luxury ferries/ tourism or cruising but are used as a means of transport, acting as the only source of connectivity between the small islands and Port Blair. The government has also viewed this favorably and clarified that there will be no GST for leased ferry service for carrying passengers including tourists as public transport for point-to-point transfer, including in the Andaman and Nicobar Islands.

Meanwhile, the IATO has also urged the government to remove the cascading effect of the GST on tour operators, suggesting that the tax be levied on the deemed value as in the case of air travel agents, where a deemed value 10% of the tour operator’s gross billing can be considered the taxable value on a deemed basis whereas it is charged on the gross value for tour operators.

In addition, IATO also suggested that a small correction be made to CGST Notification No. 11/2017-CT(R) of 28.6.2017 (as amended), where the word “and” should be replaced with the word “or”.

IATO hopes that with these amendments and clarifications, inbound tourism in India will recover more quickly, contributing to the regeneration of employment in the tourism sector and increased foreign exchange earnings for the country.





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