The Indian Association of Tour Operators (IATO) has urged the Centre to take measures to solve the challenges of multiple taxations faced by tour operators by demanding to either lower the GST charged from tour operators or to allow input tax credit and end the cascading impact of multiple taxes.

In its statement, IATO said that the tour operators suffer from multiple taxations at different levels as they offer a multitude of services, and thus they have to pay 18-23% GST. Apart from that, they also pay 5% GST on their total billing without the input tax credit. This is unfavorable as compared to the neighboring countries where GST rates of about 6-8% are charged from tour operators. IATO asked the government to treat the tourism industry as a “deemed exporter at par with the IT Industry.” It also stated that the tourism sector earns valuable foreign exchange, but is not exempted from IGST even though it provides services to foreign clients.

IATO added that the imposition of IGST and Tax Collected at Source (TCS) should be removed from composite tours. Indian tour operators are losing business as tourists in order to avoid this double taxation, prefer to book tours in other countries.