IATO has expressed its gratitude to the Government for completely withdrawing the five per cent Tax Collection at Source (TCS) charged on the sale of overseas tour packages to foreign tour operators. The same was earlier withdrawn only for individual foreign tourists but now on IATO’s representation, the Government has announced the removal of tax, both on individual foreign tourists as well as foreign tour operators (FTOs). The removal would make the tour packages offered by Indian tour operators to foreign tourists a bit cheaper and would help provide some succor to the pandemic-ravaged sector.
Many foreign tourists book overseas tour packages for neighbouring countries like Bhutan, Nepal, and the Maldives through Indian Tour Operators. However, since there was a levy, they preferred booking the tours directly with tour operators in those countries as charges were less there.
According to Rajiv Mehra, President, IATO, “The impact of this notification is that both foreign individuals and FTOs (buyers) buying overseas tour packages from the Indian Tour Operators will be exempt from TCS provisions. The foreign tourist doesn’t need to visit India for an onward journey to the neighbouring country. Secondly, the FTO/Corporate entity established in a foreign country and not maintaining any permanent establishment/branch in India would also be exempted from TCS provisions.”
Mehra further added, “Indian tour operators were losing a lot of clients because of this tax, besides the government was losing precious foreign exchange as the entire money was going to other countries. We represented the Finance Ministry on this and they found merit in our plea and thereby announced the withdrawal. We express our gratitude to the Finance Ministry and Tourism Ministry for this.”
 charged on the sale of overseas tour packages to foreign tour operators. The same was earlier withdrawn only for individual foreign tourists but now on IATO’s representation, the Government has announced the removal of tax, both on individual foreign tourists as well as foreign tour operators (FTOs). The removal would make the tour packages offered by Indian tour operators to foreign tourists a bit cheaper and would help provide some succor to the pandemic-ravaged sector.){kind=link}