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A delegation of tour operators meets with FM to push for 5% SEIS benefits.

A delegation of tour operators meets with FM to push for 5% SEIS benefits.
  • Nirmala Sitharaman, the Union Finance Minister of the Indian Association of Tour Operators (IATO), called on her office on Friday.
  • SEIS or Service Exports from India (SEIS), as a percentage of their net foreign exchange revenues, provides a stimulus to notified service providers with transferable duty credit scripts.
  • In addition to its President, Rajiv Mehra, and Pronab Sarkar, the immediate past President led the IATO delegation, which met the Minister of Finance.
  • The delegation expressed thanks to the minister for clearing SEIS for service suppliers and recent measures such as 5 lakh free tourists visas.
  • It also informed her that several pending issues, which can revitalize the tourism industry in the country, are resolved.

The Indian Association of Tour Operators (IATO) called on Union Finance Minister Nirmala Sitharaman to increase SEIS duty credit scrips percentage to 10 percent. The IATO delegation was led by its presidents Rajiv Mehra and Pronab Sarkar. The Finance Minister took up the issue of tax exemption for tour operators in the tourism sector. He also discussed tax collection at source (TCS) on the sale of the overseas tour package. The matter of loan under ECLGS was also raised by the delegation to amend the guidelines.

A delegation in her office called on Nirmala Sitharaman to be Union Finance Minister for the Indian Association of Tour Operators (IATO) Friday, urging her to raise the percentage of SEIS duties to 10%.

SEIS or Service Exports from India (SEIS), as a percentage of their net foreign exchange revenues, provides a stimulus to notified service providers with transferable duty credit scripts.

The service providers may use this credit to pay specific key duties and taxes, including the customs essential duty.

Tour operators receive SEIS scripts on their forex income at a rate of 7%, which is inadequate at the current juncture for the sector, which has been one of the most affected by the Covid-19 pandemic.

In addition to its President, Rajiv Mehra, and Pronab Sarkar, the immediate past President led the IATO delegation, which met the Minister of Finance.

The delegation thanked the minister for the clearing of SEIS to the service providers, the latest measures such as 5 lakh free tourist’s visas and government loans to the small tour operating companies, but also pointed out several outstanding issues, which could lead to a re-establishment of the tourism industry within the country if resolved.

In addition to the 7% percent of the SEIS scripts that have been given to tour operators during the past few years, the delegation also impressed her with raising it to 10%.

Unless the tour operator’s turnover capping should be considered, it should be retained if SEIS cannot be increased at 7%, the delegation said.

The IATO delegation also discussed the cascade effect on tour operators of multiple GSTs and requested GST to eliminate this ‘anomaly’ by charging GST for the total value considered, which would account for 10% of tour operators’ gross billings.

This enables the tour operator to charge the service at 18% of the mark-up (their charge), which means that the effective rate of GST in terms of the total package cost results in a gross billing of 1,8% by the tour operator without an input tax credit for its customers.

GST/IGST was also requested in the neighboring countries to be exempt from services provided outside of India, even if it includes India tours, because this would cause the tour operators to lose business.

Instead of such reservations, Indian tour operators in the neighboring countries will have reservations made due to tax exemption. This will increase the country’s considerable foreign exchange.

Another issue addressed was levies of a tax collection at source (TCS) on sales of a touring package in the OAS. It has been requested to purchase touring packages from Indian tour operators for non-residents outside of India, not to apply to non-resident foreign citizens/tourists / foreign tour operators outside of India.

The issue of ECLGS lending was also raised by the delegation asking the FM to amend NCGTC’s Guidelines because banks do not submit tour operators’ applications to benefit from ECLGS. The revised guidelines will be issued to banks. It has been made clear.

The final and most crucial point addressed by the Finance Minister was a long-standing request by the tourism industry for its export of services based on its foreign exchange income, to treat the tourism industry as an exporter on an equal footing with the IT industry, by relaxing the export parameters/definition of service and changing supply place criteria.

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