As per the leading business daily report, government is mulling to provide tax credits to tour operators. The move is likely to bring down the cost of tour packages for tourists as the GST tax implication will then be reduced on travel bookings.
The report said that the final decision on the issue will be taken in the next GST Council meet. As of now, tour operators shell out 5% as tax on tours excluding input tax credit. The travel and tour industry has demanded input credits as in its absence the tax implication comes at around 25%.
Currently, tour operators need to pay approximately 15-20% tax depending on the hotel room tariff plus GST which takes total tax figure close to 25%.
Know more about Input tax credit here.
An official informed that the GST Council could charge 12% with tax credit for all of the inputs or levy 5% with credit for input in same line of business.