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Resource Center
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FAITH Recommends Amendment To Draft GST Law To Include Tourism & Hospitality Under Export Service
August 18, 2016

FAITH Recommends Amendment To Draft GST Law To Include Tourism & Hospitality Under Export Service

http://www.travelbizmonitor.com/Associations/faith-recommends-amendment-to-draft-gst-law-to-include-tourism--hospitality-under-export-service-31370

18 August 2016

New Delhi:
The Federation of Associations in Indian Tourism & Hospitality (FAITH) has urged the GST (Goods & Services Tax) Commissionerate and Central Revenue Department to amend Section 2 (44) c to include tourism and hospitality industry services in the ‘export services’. Currently, the relevant section in the GST model law considers export service as one which is rendered abroad, thereby barring the tourism and hospitality industry from having the same tax benefits under the GST.
 
“FAITH has put forward the rationale that tourism services to foreign exchange paying tourists can't be rendered abroad as all our destinations are within India and it is an intangible product, and hence an exception needs to be provided in the law itself to the tourism & hospitality industry,” an official release by FAITH said.
 
Along with classifying tourism and hospitality industry as export service, FAITH has also demanded 0% rating of GST on tourism & hospitality exports to make India a globally competitive destination. “18-25% indirect taxation will make India uncompetitive,” the release says. Similarly, FAITH will also ask the GST council for a below 10% GST rating on domestic tourism. This is in line with global practices where the introduction of GST has seen tourism GST kept at less than half the standard rate of GST.
 
“Implementation of both of these recommendations have the potential to spur our tourism forex earnings to USD 30-35 billion from 13-15 million foreign tourists and our domestic tourism to 1.8-2 billion domestic visitations. This could double the employment induced by tourism to 9 crore jobs from 4.5 crore jobs,” FAITH argues.