Higher Goods and Services Tax (GST) in the country is hurting both inbound tourism as well as domestic tourism, said a top player in the sector. Competitive tax rates in other countries is not only discouraging tourists from coming to India, it is also encouraging local tourists to travel to foreign destinations.
Talking on the sidelines of three-day Travel and Tourism Fair (TTF) – 2018 that began in Ahmedabad on Friday, Sanjiv Agarwal, charmain of Fairfest Media Ltd, which organized TTF said that India is a rare country where there is 28% tax in tourism sector. This hurts India’s competitiveness as an attractive tourist destination. “You see countries like the USA, Singapore, Thailand. Most of the countries have tax in single digits. Very few have in double digits. But no where the tax is as high as 28%,” said Agarwal. Rooms with rent of Rs 7,500 or more are subjecte to 28% tax.
“Tourists will prefer destination like Vietnam, Thailand and Sri Lanka. There is also a provision of refund of GST on goods purchased, which is not the case in India,” he said adding that players in tourism sector have drawn the attention of government towards these bottlenecks but so far no action has been taken.He also said that demonetization and GST has hurt smaller players in the sector as India is used to transacting in cash.
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