Higher tax reduces competitiveness of tour packages

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.