Value chain

FAITH Calls for GST Streamlining in Hospitality Value Chain, Hospitality News, ET HospitalityWorld

The Federation of Indian Tourism and Hospitality Associations (FAITH) has recommended five measures for streamlining GST in the hospitality, tourism and travel value chain for consideration at the next meeting of the Council of the GST.

The industry federation has again approached the GST Council to seek permission for hotels to charge IGST which will enable seamless availability of credit across India for all travel agents and tour operators and thus drive building a sustainable vacation, meeting and convention business within India. the country.

FAITH also recommended that restaurants have the additional option of charging 12% GST with full input tax credits and that the rate be decoupled from any room rate if they are part of hotels.

Returning to the case of tour operators once again, the Federation requested a special flat GST rate of 1.8% with full GST offset. The current 5% uncompensated rate structurally implies that tour operators have an embedded margin of around 27.8%, which is an inherently flawed assumption of prevailing business models. This, by default, creates an inherent link to value added only and prevents a tax on tax, says FAITH.

He also asked the GST Council to allow travel agents to explore the reseller model for billing, as they are distribution arms for airlines. This option will allow travel agents to structure optimal partnerships according to their business needs between their customers and their airline partners.

Tourist carriers are eligible for GST offsets on interstate tourist transportation taxes, taxes on parking fees, and taxes on fuel, which are their main entry costs.

Considering the immense inherent potential of the Indian tourism sector to create up to 10 crore additional jobs across India over a long term period, triple its contribution to GDP and create foreign exchange earnings of up to 75-100 billion, FAITH said the GST should act as a key catalyst to create global and national competitiveness in tourism directly and through its indirect impact.