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Monday, 22 August, 2016, 11 : 43 AM [IST]


anuragThe doubts and needless worry about how GST will pan out is almost like crying ‘wolf’. This is especially surprising and comes across as nothing more than a pre-emptive concern for the travel business in India. The part of the new law, which is still in the making that deals with refunds and payment processes, is clearly stated to be up for stakeholder consultations. This unequivocally indicates the government’s stand to go through a detailed process of consultation before promulgating it as law.

The confusion also stems from the fact that some are even bewildered whether the travel ‘product’ will be considered as an export! This is as ridiculous as it can get. While the travel ‘experience’ is definitely ‘sold’ to tourists, it can in no way be deemed as an ‘export’. Fears of such a predicament could be carrying apprehensions too far.

However, this could have been a genuine concern in earlier years when the taxman ruled the law field. The very purpose of the new tax regime ushered in by GST is to snip the horn and tail from the taxman’s personality. Experts concur that the peculiarities of Central laws like input service distribution mechanism for service providers will be dealt with summarily and comprehensively.

The harmonisation of Centre and state tax administrations would reduce duplication and automation would increase speed and reduce errors. The scores of octroi, entry taxes levied by various states, purchase and luxury taxes, state cesses, surcharges and numerable taxes levied by local bodies on transport and movement will all be subsumed within the GST. This will make life easier for the business. Of course it will herald the death knell of sundry cash transactions, but that should not worry the professional travel bodies.

A senior industry person remarked that while tax reform might be good, his worry was that tourism might be treated as a luxury and taxed too heavily. When none other than the Prime Minister has repeatedly hailed the tourism industry as the harbinger of economic growth for the common man, this doubt might be possibly a defensive reaction to any change or something new.

Anurag Yadav
Industry Expert
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