Travel and tourism companies, struggling with the impact of restrictions imposed on account of COVID-19, are hoping for some relief from the government in the form of a cut in the goods and services tax rate to a flat 5 percent, easier liquidity norms and softer loan repayment terms.
Executives said that with the coronavirus pandemic having hit their sector hard, the current rates of GST, which can go up to 18 percent depending on the size of operations, are not feasible.
The Indian Association of Tour Operators, a grouping of over 1,600 members including travel agents, hotels, airlines and transport operators, had written to the Union government asking for a rationalisation of GST rates. However, the issue was not discussed at the 44th GST Council meeting held on June 12, when rates for various COVID-related medical supplies were reduced.
For hotels and airlines, GST depends on the tariffs. A room that costs upwards of Rs 7,500 daily attracts GST of 18%, while a tariff between Rs 1,000 and Rs 7,500 is subject to 12% tax. GST isn’t applicable if the daily room rate is less than Rs 1,000.
Restaurants in hotels are subject to 18% GST if the daily room tariff is above Rs 7,500. If it’s less, GST stands at 5%. For airlines, business class tickets come with 12% GST and economy fares attract 5%.
Officials and executives from the sector say the various slabs should be scrapped and a flat 5% rate should be introduced in the hospitality sector, at least until the end of the pandemic.
Source from: https://www.moneycontrol.com/news/business/pandemic-hit-travel-tourism-sector-seeks-gst-rationalisation-7054661.html