IATO expresses its sincere thanks to Union Government and in particular Finance Ministry for giving partial relief of deferring Tax Collection at Source (TCS) on the Overseas Tour Packages till 30th September 2023 and also withdrawing the increase of TCS percentage from 5 per cent to 20 per cent on amount upto Rs 7 lakh per annum.
He also thanked the Minister of Finance and Secretary of Revenue for considering the non-applicability of TCS on an amount of Rs.7 lakh per person per annum on overseas tour packages.
While appreciating the government’s decision, Mr Rajiv Mehra President, IATO said, “Though we are happy with this rollback, our long-standing demand is that the TCS should be reduced to 2.5 per cent as the main objective of the government is to bring more into the tax net and if the government reduces the TCS percentage on overseas tour packages, higher number of people will book through the Indian Tour Operators who are registered in India, instead of booking tours directly with the foreign tour operators or booking online tour operators who are not registered in India and are not liable to collect tax at source.
IATO also advocates that the international credit card should not be included in the LRS i.e. that was being followed before 16th May 2023 should continue. The new taxation regime would put the onus of collection of tax on the tour operators for which tour operators neither have the band with or the resources required for implementing it. Mr Mehra adds, “Tax regime should foster ease of doing business while the new regime would work cross purpose to it. We would want the government to reconsider this aspect as well.”
