Travel Budget: Budget 2023: Be ready to shell out more for that dream trip abroad

Overseas tour packages could get costlier for travellers, with the budget proposing a fourfold increase in tax collected at source (TCS) on such tour packages to 20% from 5%, said travel agents and tour operators.

Rajiv Mehra, president of the Indian Association of Tour Operators, said the budget proposal will force some of the association members who cater to outbound tourism to shut their businesses.

“This needs to be rolled back immediately,” said Mehra. “None of our demands like rationalisation of GST (goods and services tax) on tourism industry, exemption of GST on foreign exchange earnings and refund of tax on shopping under the Tax Refund to Tourist Scheme, for which there is already a provision in the GST Act, have been considered.”

Travel Agents Association of India president Jyoti Mayal said the association was still seeking clarity.
Madhavan Menon, chairman, Thomas Cook (India), said he would urge the government to reconsider this proposal as it will significantly increase the upfront cash outflow for end-consumers. “It will drive more of these customers to use alternate channels that are outside the domestic tax net,” he added.

The increase in TCS on overseas tour packages will put domestic operators at a disadvantage, said MakeMyTrip group CEO Rajesh Magow. “It will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators,” he said.

Aloke Bajpai, group CEO of ixigo, said leisure vacations abroad can get costlier for Indian travellers with a higher TCS on overseas tour packages. Vijay Dewan, MD of Apeejay Surrendra Park Hotels, said the move was a negative step for the travel sector.

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