The tourism and hospitality industry is likely to get relief in the form of a new margin scheme from the upcoming GST Council, which is scheduled to meet on June 28 and 29 in Chandigarh.
“Tour operators are of a view that the effective GST tax rate on tour operators is very high and most of them pay GST at the rate of 5 percent without ITC, thus they have been seeking relief,” sources said.
Noting the hardships and given the fact that tour operators have been arguing and presenting their case with various representatives of the GST Council and GST Secretariat, the fitment committee has examined their demand at a greater extent, sources said.
“It has been suggested by the fitment committee that if the GST Council could examine a new margin scheme for the tourism and hospitality sector, it can ease their pain points,” sources added.
According to the proposal moved by the GST Council secretariat, if the Council agrees then “a new margin scheme for tour operators to pay GST on value arrived at on deemed basis. The deemed value can be decided by considering certain percentage of gross tour cost, which can be representing a fair competitive margin. But they should not be allowed to avail input tax credit,” sources added.
“This new scheme could be allowed where the tour is all inclusive or includes either the hotel accommodation or transport,” sources added.
If the Council agrees, “then it is likely that the new scheme will be designed in a month's time and it could make the tax incidence on tour operators competitive, thus giving them an upper edge,” sources said.
Also, the Council can give clarity on the fact that “in case of tours conducted for foreign tourists partially in India and partially outside India, then the tour operator to pay GST on amount paid for travel in India,” again which could ease a lot of taxes for both the tourists and the tour operators.
Source: CNBC TV18
https://www.cnbctv18.com/economy/gst-council-may-announce-a-new-margin-scheme-for-the-tourism-and-hospitality-sector-13917622.htm
For more News like this, Subscribe TAXO today
