Doing away with double taxation, exemption of service tax on foreign exchange earned, and simplification of taxation laws are some of the demands domestic tour operators want addressed in the Union Budget.
The Union Budget for the fiscal 2016-17 is scheduled to be presented on February 29.
“The services of tour operators earning foreign exchange for the country should be exempted from whole of service tax. It should be treated at par with the phyical goods exporters earning foreign exchange,” IATO President Subhash Goyal said.
IATO claims to have over 4,000 members, covering all segments of tourism industry.
Goyal said foreign exchange earnings should also be exempted from the proposed GST till international tourist arrivals in India touch the 30 million mark yearly.
Foreign tourist arrivals in 2015 grew by just 4.4 per cent to 80.16 lakh against 76.79 lakh in 2014.
“Considering the meagre share of global tourist arrivals, compared to the size and the huge opportunities that the country offers, government should keep the tourism industry free from any taxes including GST till the country receives 30 million foreign tourists yearly,” he said.
Besides, he said, litigations in service tax department are increasing due to frequent changes in service tax laws. Goyal said service tax laws needed to be made simple to understand and follow.
He also urged the government to address the issue of double taxation on outbound tour operators.
“In case of outbound tour, only the service portion which is rendered in India should be taxed and rest should be out of the service tax,” he said.