GST flag for Budget
While Union Budget 2017 saw the industry fretting over how the GST regime would come into effect, it was finally implemented on July 1, 2017. And now, in the 2018 Budget, the industry is still coping with the GST aftereffects. While the GST council did address the initial issues of hotels, including the reduction of GST from 28 per cent to 18 per cent for hotels priced under 7500, there seems to be no such respite for tour operators. The travel agents are still hoping for the government to look into the overall 5 per cent GST levied on tour packages, despite individual services being already taxed in the package. This cascading effect, according to inbound operators, make the package expensive, which in turn makes India a costlier destination as compared to its neighbours. Another issue is the lack of clarity over how outbund packages would be treated in this scenario. Outbound tour operators claim that their packages do not fall under the purview of GST since they are not offering any services within the country. However, the decision on the same is still awaited and we hope that Union Budget 2018 will address this.