Kerala Travel Mart appeals to Arun Jaitley to reduce GST on hotels to 18 per cent

KOCHI: Kerala Travel Mart (KTM) Society, a leading tourism body of Kerala, has expressed serious concern over high rates of taxation under the new GST regime, saying it would stifle the tourism business in the country by making it unsustainable and drive away the foreign tourists to destinations other than India.

"The high incidences of taxes will make India uncompetitive when it comes to tourism as international tourists will skip the country as a destination. There is almost a 19 per cent tax hike for an Indian product after the implementation of GST. The Centre should address the issue urgently,” said KTM president Abraham George.

The industry has already been reeling under the impact of demonetisation and liquor ban on highways, he said, adding that implementation of GST has also started adversely impacting the business.

In a memorandum to Union Finance Minister Arun Jaitley, KTM president appealed to the Centre to reduce the tax for hotels from 28 per cent to 18 per cent, substantially bring down the tax on houseboats and declare tax holiday for inbound travellers. In the pre-GST regime, hotels were charging 19 per cent tax on rooms.

Making a strong case for rectification of tax anomalies, he said the tax has been to the tune of 38 per cent on tour packages for domestic travellers and 33 per cent for inbound international tourists clubbing the hotel tax with tour operators.

"The high tax of 28 per cent plus the tour operator’s tax of five per cent is costing a foreign traveller hotel tariff of 33 per cent whereas the average tax rate in foreign countries is between 7 per cent and 17 per cent,” George pointed out.

A KTM delegation, led by Abaham George along with KV Thomas, MP, held discussions with Union Tourism minister Dr Mahesh Sharma, Tourism secretary Rashmi Sharma, the GST Council Chairperson and officials of the Union Finance Ministry and GST Council, drawing their attention to the serious anomalies