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Tour packages to India will get more expensive due to new taxation

Tour packages to India will get more expensive due to new taxation
In India some changes have been made by the Department of Revenue, Ministry of Finance, Government of India in the service tax vide notification no. 4/2017 dated 12.01.2017. These changes had been in place since January 22, 2017.

The Federation of Associations of Indian Tourism and Hospitality–FAITH- has appealed to the Finance Minister to see that the amendments in the abatement notification should be reviewed so that the tourism industry is not hit.

Tour packages will see a two-fold increase in taxable value because of the amendment.

Medical tourism may also suffer, FAITH said in a letter on service tax to the Finance Minister.

The federation has also sought the help of the Ministry of Tourism and Ministry of Commerce to see that the tourism is not impacted adversely because of the amendments.

As per the notification service tax abatement to tour operators will now be 60% and the service tax on tour operators after abatement will be applicable @ 6% inclusive of 0.5% Swachh Bharat Cess and 0.5% Krishi Kalyan Cess on all billings instead of 1.5% (on hotel accommodation only) and 4.5% (on tour packages/transport services by tour operators). However, Cenvat Credit can be availed by tour operator on all input services.
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