Lok Sabha Question No. 61 (UNSTARRED), answered on 2024-11-25
Subject: Uniform Tax Structure for Tourism Industry
Ministry: TOURISM
Asked by: Shri Dushyant Singh

## GOVERNMENT OF INDIA MINISTRY OF TOURISM

## LOK SABHA

## UNSTARRED QUESTION NO.61 ANSWERED ON 25.11.2024

## UNIFORM TAX STRUCTURE FOR TOURISM INDUSTRY

- 61 SHRI DUSHYANT SINGH:

Will the Minister of TOURISM be pleased to state:

- (a) whether  the  Government  acknowledges  that  different  services provided  by  the  tourism  industry  in  the  country  are  subject  to varying tax slab rates under the Goods and Services Tax (GST), and, if so, the details and reasons for these varied rates;
- (b) the details of the steps taken/to be taken by the Government to establish  a  Uniform  Tax  Structure  for  the  tourism  sector  to simplify  operations  for  service  providers  and  enhance  industry
- coherence;
- (c) whether  the  Government  has  any  plans  to  consider  similar policies  to  boost  tourism  in  the  country  in  light  of  successful international strategies, such as those employed by the Thailand i.e. event marketing, promoting secondary destinations, engaging celebrities and influencers and providing visa exemptions, if so, the details thereof;
- (d) the  manner  in  which  adjustments  in  tax  rates  and  GST  play  a role in the country; and
- (e) the manner in which the plans proposed by the Government to simplify,  rationalize  and  streamline  regulations  in  the  Indian tourism industry?

## ANSWER

## THE MINISTER OF TOURISM     (SHRI GAJENDRA SINGH SHEKHAWAT)

- (a)  &  (b):  Yes.  The  Department  of  Revenue,  Ministry  of  Finance  has informed  that  GST  rates  and  exemptions  are  prescribed  on  the recommendations of the GST Council, which is a constitutional body comprising representatives from both the Centre and the States/UTs. The existing GST rate structure for services provided by the tourism industry is as below:

| Service                      | GST rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Tour operator Service        | 5% without input tax credit (but ITC of input services in the same line of business is allowed) subject to the following condition: The bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour. Or 18% with ITC. |
| Hotel accommodation services | 12% (where value of supply of a unit of accommodation is less than or equal to Rs. 7500/- per unit per day or equivalent). 18% (where value of supply of a unit of accommodation is more than Rs.7500/- per unit per day or equivalent.                                                                                                                                                                                                                                   |
| Restaurant services          | 5% without input tax credit in all cases other than where the restaurant service is provided at 'specified premises'. 18% - where the restaurant service is provided at 'specified premises'. 'Specified premises' means premises providing 'hotel accommodation' services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.                                                                   |
| Cruise Tourism               | Currently, Cruise Tourism attracts the standard rate of 18% GST.                                                                                                                                                                                                                                                                                                                                                                                                          |

On the basis of the recommendations made by the GST Council in the past,  the  following  steps  have  been  taken  in  relation  to  the  tourism industry with a view to create uniformity in the tax structure:

- i. The rate of GST applicable on hotel rooms above Rs. 7,500 has been reduced from 28% to 18%.
- ii. The  rate  of  GST  applicable  on  hotel  rooms  of  Rs.  7,500  and
3. below has been streamlined at a uniform rate of 12%.
- iii. A  uniform  rate  of  GST  on  restaurants  of  5%,  without  input  tax credit, has been implemented  irrespective of whether the restaurants are air-conditioned or not.
5. (c): The  Ministry  of  Tourism  holistically  promotes  tourism  in  India through  an  integrated  marketing  and  promotional  strategy,  and  a synergized  campaign  in  association  with  the  travel  trade,  State Governments and Indian Missions overseas. The following promotional activities  are  undertaken  to  increase  footfalls  of  foreign  visitors  to India:
6. (i) Participation in international travel fairs and exhibitions such as World  Travel  Market  (WTM)  London,  Feria  Internacional  de Turismo (FITUR) Madrid, International Travel & Hospitality Show (MITT)  Moscow,  Asia-Pacific  Incentives  and  Meetings  Event (AIME) Sydney, Internationale Tourismusbörse (ITB) Berlin, Arabian Travel Market (ATM) Dubai, International Meeting Exchange (IMEX) Frankfurt, International & French Travel Market (IFTM) Top Resa Paris, Japan Expo, Internationale Tourismusbörse Asia (ITB Asia), Singapore etc.
7. (ii) The Chalo India initiative has been launched by the Ministry to encourage the huge Indian diaspora to become Incredible India ambassadors and encourage their five non-Indian friends to visit India, every year.
8. (iii) Chalo India portal has also been developed for registration of the Indian diaspora. Further gratis e visa to one lakh foreign tourists, visiting India under the referral program was announced.
9. (iv) Ministry  of  Tourism  has  launched  the  Incredible  India  Content Hub on the revamped Incredible India digital portal (www.incredibleindia.gov.in) on 27th September, 2024. The Incredible India Content Hub is a comprehensive digital repository of high-quality images, films, brochures and newsletters that is easily accessible by the industry stakeholders (travel media, tour operators, travel agents) across the globe for use in all their marketing and promotional efforts to amplify  Incredible  India.  The  revamped  Incredible  India  Digital Portal is aimed to be a tourist centric, one-stop digital solution designed to enhance the travel experience for visitors to India.
10. (v) Inviting media personalities, tour operators and opinion makers to  visit  the  country  under  the  Hospitality  Programme  of  the Ministry.
11. (vi) The  promotions  are  being  carried  out  in  association  with  the State  Governments  and  the Overseas  India  Missions  including the 20 identified Indian Missions.
12. (vii)   In  order  to  facilitate  smooth  visa  issue,  Government  of  India provides e-visa facilities to nationals of 167 countries. E-Visa is presently  available  under  nine  sub-categories  and  processed totally on the online platform. Further, Ministry of Home Affairs has informed that nationals of Thailand may be granted 30 days e-Tourist  visa  with  double  entry  on  gratis  basis  for  six  months from 1st July 2024 to 31st December 2024 or till further orders. Further,  Malaysian  nationals  may  also  be  granted  30  days  eTourist visa with double entry on gratis basis for one year from 1st July 2024 to 30th June 2025, or till further orders.

(d): The  adjustment  in  tax  rates  and  GST  play  important  role  in balancing the needs of the industry to grow and generate revenue for Government to meet the expenditure for developmental activities.

(e): The  Ministry of Tourism  registers/approves/classifies hotels, heritage  hotels,  legacy  vintage  hotels,  guest  houses,  Timeshare Resorts, Operational Motels, Bed & Breakfast/Homestay Establishments,  Tented  Accommodation,  as  well  as  Online  Travel Aggregators,  Stand-alone  Air  Catering  Units,  Convention  Centres, Standalone Restaurants and other tourism service providers such as tour  operators,  travel  agents  and  tourist  transport  operators  as  per the extant Guidelines issued for the categories as mentioned above.

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