Category Archives: Agents

While this ruling will affect tour operators’ business, there is still confusion over if the increase on service tax would be 6 per cent or 9 per cent. P.P. Khanna, President, ADTOI, says, “We have called a meeting on the same. I feel that with this announcement, the government is preparing us for the GST. There is already a big load on tour operators, as we are competing with OTAs. We know that tour operators come to be a bit costlier because they are already paying service tax, which is not the case with OTAs. Now, with the new tax regime, it would be another blow to our businesses. We only survive on relationships we build up with our customers and their loyalty. However, with more price hikes, we would sure lose out on our business. On one hand, the government wants to increase the employment and revenue in tourism, on the other hand, it is heavily taxing the tour operators.”

Rajan Sehgal, Chairman – Northern Region, TAAI; Director, Arrivals Air Services, opines that post-demonetisation, the travel industry has already lost out on a lot of business with inbound and domestic tourism witnessing a decline. He says, “The times have already become tough for the industry and with the announcement of the tax on tour packages, things are only going to get worse. This is probably the only industry with no structured income and often, non-IATA agents or agents who have not been recognised by the Ministry of Tourism are earning more than the verified ones. Such decisions are discouraging more agents to get recognised by the tourism bodies since they are getting more returns without it. Here we discuss about how taxes need to be lowered to boost tourism but it looks like the opposite is happening.”

Riaz Munshi, Managing Director, N. Chirag Travels and Vice President, OTOAI, says it is a negative and an unfortunate move for the tourism and hospitality industry. “The increase in service tax is almost nine per cent more and a deterrent to our business as it reduces the competitiveness of our packages. The government has to understand that the products sold are available globally and an Indian traveller might as well buy a package for Singapore from a travel agency based in Singapore rather than pay 9 per cent extra tax to an Indian travel agency. The travel agencies based abroad do not need to pay this service tax and thus can sell packages at a much cheaper rate than us. We as OTOAI will put forward our concerns to the government and highlight how this move is a dampener to the growth of our tourism industry.

Ankush Nijhawan, MD, Nijhawan Group, “I think this increase in service tax is just the trailer for GST to set in. The government has made a soft opening to what GST will have in store at 14-18 per cent. Given this move, the tourism and hospitality industry has to brace itself for high tax rate when GST will be implemented. The prices will shoot up in short term and the effect will be seen on outbound as well as domestic travel. The increase in prices of holidays sold as packages will result in travellers to pay more and the business will be impacted temporarily. However, we need to wait for what GST has in store when it is implemented in June this year.

Guldeep Singh Sahni, President, OTOAI, says “With this move, the tax for us is going to increase from 4.5 per cent to almost 9 per cent. The move will directly affect the offline tour operators within India and it will in turn be beneficial for those who take booking outside the country, as they won’t come under any such laws. Over 20 million people from India are travelling outside the country and the outbound travel industry is creating so many jobs. Taxing this sector would only affect the tour operator businesses in India and would allow anybody to operate the same business for Indians outside India. It’s an unjust tax and would kill the tourism industry in India.”

CA Manish Gadia, Partner, GMJ & Co, says, “The Service Tax has indeed gone up from 1.5 per cent to nine per cent on the total tour package now, which is a huge jump. While the tour operators will now have to pay a higher tax, they will also stand to benefit from this as they can now take set-offs in the form of CENVAT credit. According to this, service providers are allowed a set-off of the taxes paid on the services that are incurred while providing the same.”

According to a recent ruling, starting January 22 2017, tour operators will have to pay a service tax on 60 per cent of the amount they bill the customer. The move might make the cost of the tours to go up by 10-15 per cent. Before this, tour operators had to pay service tax on 25 per cent of the bill amount if they offered a packaged tour, and in case of offering their service for booking a hotel as part of a tour, they paid service tax on only 10 per cent of the bill amount. For any other tour-related service, the service tax was on 40 per cent of the bill amount.

As a part of the systematic efforts to provide education to the underprivileged kids, Cox & Kings Foundation- the philanthropic arm of Cox & Kings Ltd along with The Mamta Trust, has set up a new pre-primary school for underprivileged kids in Pune. The school will provide quality education, nutrition and care to the youngest and most vulnerable children in the area.  The admissions for the new academic year are open and once started, the school will run in two batches a day with almost 100 enthusiastic children. With quality education, the children will also get smart uniforms, daily nutritious snacks and stationery and learning supplies.  All these are free of cost except a small token fee of Rs. 200 which is charged to acknowledge the parents’ dignity. This also helps them to value the education that their children are receiving.

Representation company Global Destinations has added three new partners to its portfolio in 2017: AlliedTPro, Infinity Escapades and Leisure Pass Group. The companies will be represented from the Mumbai office of Global Destinations, along with its 18 other partners, starting January 1, 2017. With the new additions, Global Destinations will be representing travel companies from continents across the globe. Speaking about getting their new partners on board, Pranav Kapadia, Founder, Global Destinations, says, “We are very excited about our new partnership with three esteemed companies – AlliedTPro, Infinity Escapades and Leisure Pass Group. Each company is a leader in its segment and the alliances will enable us to provide our stakeholders a whole new variety of offerings. 2016 has been a good year for us with the addition of new products to our portfolio and being announced as the GSA for Air New Zealand in India.” While AlliedTPro, head-quartered in New York, is a major in the USA and Canada inbound market, Infinity Escapades is a full-service Travel Management Company from Morocco and Leisure Pass Group is a sightseeing and tourism technology specialist that develops and manages city passes.

To connect better with its members and the partners, Network of Indian MICE Agents (NIMA) will soon be launching its android-based mobile application “Let’s Connect” Version 1.0 later this month. “NIMA always strives to add value for its members, and this mobile application is one such innovative step,” said Gajesh Girdhar, National Coordinator, NIMA. Maj. Vikrant Gulani (Retd.), Coordinator PR said that NIMA’s mobile App will take the MICE operators to a digital networking platform. The official website www.thenima.in will also be re-launched with new look and additional features, he added.