Once again TAAI has written to the ministry bringing to the fore the challenges faced by the travel fraternity due to the proposed implementation of TCS.
This is further to the various communications TAAI has had with the Ministry of Finance, Govt. of India as well as CBDT on the matter regarding abolishment of Tax Collection at Source (TCS) for Overseas Tour Packages,
TAAI has requested a meeting with the ministry on the subject matter of TCS as well as appealed not to implement the increase in TCS, which shall be effective from 1st Oct. 2023 and the same to be differed.
A letter has been addressed to Hon’ble Finance Minister, Nirmala Sitharaman, Ministry of Finance, on the Abolishment of tax collection at source for overseas tour packages with the following brief:
The subject of TCS was different by the Finance Ministry in the month of June 2023 and was to be effected from 1st October 2023 to 20% on overseas tour packages to be levied by the matter.
As per TAAI’s understanding and as per circular no 10 of 2023 dated 30th June 2023 5% TCS would be levied up to packages of Rs. 7 lakh and any incremental amount thereon of the package cost, TCS @ 20% shall be applicable.
The challenges faced by TCS are huge and a lot of business is getting diverted to overseas tour operators operating out of India which is directly impacting the revenues of India on income tax by Travel Agents/Tour Operators, GST as well as hitting on the livelihood of Indian Tour Operator companies doing business of outbound tours. Due to this, the Indian Tour Companies have become less competent as compared to operators working outside of India who save on 5% GST and the TCS (5 to 20%) and have no registration in India.
Moreover, the risk of these overseas companies shall also impact the passengers at large as the quality and sustainability of these companies when services are not delivered as desired by the passenger or fraud may occur.
TAAI’s previous representations in the matter of TCS have requested the Finance Ministry to abolish TCS as a whole on overseas tour packages. Currently, RBI/Banks are not equipped to maintain and monitor the limits of Rs. 7 Lakhs per traveller and there is no mechanism to track the same.
There is still ambiguity on the payments made for such packages through credit cards overseas. The Association humbly appeals and requests to kindly have a mechanism and system in place so that the monitoring can be effective without loopholes and be such that shall benefit the citizens of our country, and the tour operators of our country as well as bring revenue to the Government of India.
TAAI once again requests the Hon’ble Minister’s good offices to differ the TCS implementation and abolish the same until further notice and have a consultative dialogue with us at TAAI which is the largest and nodal association of travel agents and tour operators in India since 1951. This should certainly be differed till the next financial year thus giving us an opportunity to discuss and deliberate.
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