Tag Archives: GST

Taking measures to mitigate COVID-19 impacts on the industry, the Rajasthan Government has extended a helping hand to hotels and tour operators registered in the State. According to an order by the state government, it has been decided to reimburse State Tax due and deposited by hotels and tour operators registered under Rajasthan Goods and Services Tax Act, 2017. The order for a reimbursement of State Tax due and deposited to hotels and tour operators will come into effect from April 1 and will remain in force till June 30. ‘State Tax due and deposited’ means the amount of State Tax (SGST) paid through debit in the electronic cash ledger account maintained by the enterprise after complete utilisation of the available amount of input tax credit of the SGST and Integrated Goods & Services Tax (IGST). This order will be applicable for taxable persons registered under the category of hotels, heritage hotels, resorts and tour operators. However, it will not cover stand-alone restaurants and clubs. Beneficiaries will be entitled for reimbursement of State Tax due and deposited in the operative period in the manner as may be prescribed, provided no reimbursement under this order is available for SGST to be leviable and paid on rental or leasing services, including own or leased non-residential property.

Voicing his opinion of the Union Budget, Gurbaxish Singh Kohli, Interim President, FHRAI, said, “The industry expectations were high but the Union Budget has neglected us completely and we are disappointed yet again. While the Govt. wants to give impetus to hospitality and tourism and our. PM has envisioned big things for the sector, there is no mention except for the 17 tourist-friendly spots which we welcome. We were expecting reforms in rate slabs of GST, Input Tax Credit and a definitive step to boost the domestic and inbound traffic. Hospitality plays a vital role in the growth of the economy therefore this sector cannot be ignored. It is one of the biggest contributors to GDP, taxes, Foreign Exchange and most importantly in generating employment. The success of Incredible India lies in managing its hospitality and tourism right and requires policy support.”

Pronab Sarkar, President, IATO, shared that there was again no focus on tourism in Union Budget 2019-20, except that the government re-emphasised on 17 iconic sites being developed into world-class tourist destinations, which has been taken forward from the last Budget. “However, we welcome the mentioning of simplifying of GST process and absorbing of charges on digital transactions, which will encourage digital transactions. We also welcome the government’s plan to restructure the national highways programme to create a network of highways for better connectivity, upgradation of 125,000 km of roads in next 5 years at a cost of 802.5 billion rupee, more focus on Swachh Bharat mission and expansion of Railway suburban networks which will boost tourism as with increased infrastructure, better road connectivity and clean India, foreign tourists will be attracted.” He added, “We have been requesting the Government  for rationalizing of GST on tourism and hospitality, exemption of GST on foreign exchange earnings by the tour operators and treating tourism industry as deemed exporters and extending all benefits to the tourism industry as are being given to physical exports of goods and reduction, in Tourists Visa Fee so that we can compete with our neighbouring countries on foreign tourists arrivals, which will not only help bring in more foreign exchange but also create new jobs. However, this all remains pending and we hope our requests will be considered by the GST Council and Finance Ministry will consider the importance of tourism industry in employment generation and contribution in economic growth of the country.”

The Maintenance, Repairs & Overhaul (MRO) Association of India (MAOI) has appealed to the Finance Ministry to, on priority, fix the lop-sided tax policies to create a level playing field between the Indian MRO industry and foreign MROs. The MAOI has stated that in the current financial year 2018 -19, the industry has registered negative growth. With 90 per cent of the MRO requirements of India being imported, the import driven policy has lost 90,000 direct jobs to countries like Sri Lanka, Singapore, Thailand, France and Germany. The MAOI has made recommendations to the government for the future and growth of the Indian MRO industry: reduce GST for Indian MRO services to 5 per cent to bring it on par with foreign MRO services. Alternatively, customs duty on MRO services (where such capabilities exist in India as per DGCA CAR 145 approved organisations list) should be applied at 18 per cent on all imports and grant of ‘infrastructure’ status to MRO industry. Bharat Malkani, President, MAOI, says, “Based on data from Original Equipment Manufacturers (OEMs), the current fleet of 550 airliners is expected to grow to 1000 by 2023. The government is focused on creating new infrastructure and is encouraging domestic carriers to expand their fleet size. While this is a positive development for Indian Aviation, it has no bearing on its immediate ancillary MRO sector. This is because the present GST for importing MRO services to India is levied at 5 per cent, whereas the same services offered at home are taxed at GST of 18 per cent. Of the several requests we are making to the Ministry through the pre-budget memorandum, our highest priority is to have the GST …

Centre has announced reduction in GST (Goods and Services Tax) on a total of 23 goods and services. Under the new rates, air travel of pilgrims by non-scheduled/charter operations, being facilitated by the government under bilateral arrangements, will attract a lower GST rate of 5 per cent. This would include pilgrimages like Mansarovar Yatra, the Haj, and the Pashupatinath tour. These tours are usually done by chartered and non-scheduled flights, and will now be cheaper under the new GST rates. Earlier, tours through chartered flights attracted 18 per cent GST.

PP Khanna, President, ADTOI, said they had been looking forward to some GST relief in the Budget. “There has been no relief in GST in the Union Budget 2018-19, we had been looking forward to it. However, the budget offers some SOPs to tourism sector by announcing 10 prominent tourist sites to be developed into iconic ones and enhancing visitor experience in 110 Adarsh monuments under the ASI, with railways to have Wi-Fi and CCTV cameras on all trains and stations. Enhancement of sea plane activities and boosting aviation sector with the present 124 airports, the government plans to take this up five times to accommodate one billion trips per year. Focus on infrastructure, education, healthcare, creation of jobs has been highlighted in the budget, which is a good move.”

Strengthening its corporate travel segment, Yatra.com has launched a self-booking platform for Small and Medium Enterprises (SME) providing corporate customers with comprehensive and convenient travel solutions. Dhruv Shringi, Co-founder and CEO, Yatra.com says, “Yatra’s latest self-booking platform significantly reinforces our position in the large and growing corporate travel market in India. The platform will revolutionise the way business travellers search and book flights and hotels, ultimately saving both time and money in the process.” The newly launched, easy to use online platform includes a range of enhanced features which will empower the SMEs to automate their process to fulfill end-to-end travel business needs. SMEs shall get curated hotel options, best corporate deals and nil to economical cancellation and rescheduling charges. The Goods and Services Tax (GST) complaint system will allow the user to search through a range of flight and hotel options as per the company travel policy and follow the in-built trip approval process to seek their supervisor’s approval. They shall also have access to real time Management Information System (MIS) reports to enable them to monitor their travel expenses. Furthermore, the invoices will be instantly mailed to the registered email ID. There is also a 24×7 support helpline available for support required on visas, passports, and other offline requests. Using this platform, SMEs can manage their company and employee profiles, travel policy compliance, and approval workflow. “We believe that this technological advanced platform will empower SMEs to control their travel needs, while at the same time making it inherently easier for their employees to make bookings in an easy and convenient manner,” Shringi added.

The Ministry of Finance announced December 27, 2017 as the late date for filing the TRAN-1 form under the Goods and Services Tax (GST) to avail input tax credit. The Ministry, in a release, informed that a taxpayer could file Form TRAN-1 and avail input tax credit on the basis of closing balance of the input tax credit declared in the last return under the pre GST regime. In keeping with the philosophy of voluntary compliance, revision of Form TRAN-1 has also been provided. The last date for revision of TRAN-1 is also December 27. The Ministry noted that some taxpayers have availed extraordinarily high transitional credit of CGST. Such behaviour leads to breach of trust between the taxpayer and the tax-administration, the release said. Taxpayers who have claimed transitional credit erroneously are advised to avail of the opportunity to revise Form TRAN-1 within the deadline, failing which the tax administration would be constrained to initiate audit and enforcement action against the identified units, the release mentioned.

The upcoming wedding season starting in November may be impacted by 10-15 per cent, particularly wedding services like marriage garden/marriage hall booking, tent booking, confectionery services, photography and more, reveals industry chamber ASSOCHAM. The GST rate on most of these services has risen from 18 to 28 per cent. Destination wedding or the wedding tourism sector in India which accounts for less than 10 per cent share in the overall industry is not likely to face much adverse impact of GST and demonetisation as it is already a costly affair which mainly lures foreigners, NRIs, rich and famous people for weddings at beaches and royal palaces, says the ASSOCHAM paper. All footwear above Rs.500 is taxed at a whopping 18 per cent. Tax on gold and diamond jewellery has increased from 1.6 per cent to 3 per cent. The booking for a five-star hotel will cost 28 per cent extra in the form of GST. Also, event management service, will have to pay an additional 18 per cent GST on the cost. GST on marriage garden and hall booking is also 18 per cent, same as most other wedding services.

Travel agents providing online ticketing and other services will be liable to deduct one per cent tax at source under the GST regime as they have been classified as e-commerce operators, the CBEC said. Under the Goods and Services Tax (GST) regime, an e- commerce operator is required to collect 1 per cent of the net value of taxable supplies made through it. The amount so collected is called tax collected at source or TCS but this provision has been kept in abeyance for the time being. Online travel agents have been classified as e-commerce operators (ECO) and so they have to deduct TCS. The Central Board of Excise and Customs (CBEC), in a fresh set of frequently asked questions (FAQs), said the TCS requirement would not apply to someone selling own products through a website. Only applicable GST for the goods would be levied in that case. Electronic commerce or e-commerce means supply of goods or services, including digital products, over elect .. electronic network and an e-commerce operator is a person who owns operates or manages the electronic platform for e-commerce, it said. “Online travel agents providing services through digital or electronic platform will fall under the category of ECO (e- commerce operator) liable to deduct TCS under Section 52 of the CGST Act, 2017,” the CBEC said.