Tourism sector: 2% sustainability fee defeats purpose of GST

By: Admin
July 04, 2024
Categories: GST Recent News
4 Min Read

The tourism department’s proposal to introduce a ‘tourism development and sustainability’ fee has sparked significant concern among stakeholders, who argue that it contradicts the industry’s longstanding recommendations to the state government. Industry representatives claim that the new tax undermines the purpose of GST, which was designed to consolidate all taxes.

According to sources, the Travel and Tourism Association of Goa (TTAG) has deemed the fee “uncalled for” and is urging a reconsideration. “The tourism industry is already heavily taxed. Imposing a 2% levy on every invoice will hurt our competitiveness and increase compliance burdens. No other major tourism destinations in India, such as Kerala and Rajasthan, levy such a fee,” TTAG stated in a letter to the tourism department.

A hotelier interviewed by TOI described the proposed fee as “ridiculous” and hastily introduced. “Goa already has numerous taxes, including GST, VAT on alcohol, trade tax, and garbage tax, and now a new tax is being added. While countries like Thailand are reducing prices, we are considering raising taxes,” the hotelier said.

Former GCCI president and tourism veteran Ralph de Sousa argued that the additional taxes negate the purpose of GST. “This is contradictory to our goals. Parallel taxes will not benefit the tourism industry, especially in today’s competitive global market. Besides GST, we already have substantial local taxes, such as garbage tax, professional tax, and other fees collected at the panchayat level,” said Sousa.

A basic survey by TTAG estimates that Goa’s tourism and hospitality industry generates around Rs 2,500 crore in indirect taxes, including GST, VAT, and excise. Additionally, local bodies like panchayats and municipal authorities impose waste management fees, trade taxes, and signboard taxes.

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