IATO calls for tax reduction in tourism sector

Indian Association of Tour Operators (IATO), the apex body of tour operators in the country, has sought reduction in the tax component on the tariff of tour packages of international tourists to boost India's inbound tourist inflow.

At present, the various taxes like luxury tax and service tax account for 40-45 per cent of the cost of tour packages for the international tourists. IATO is in favour of bringing down the share of taxes in cost of the tour packages, designed for the international tourists to come down to 15 per cent.

"Taxes comprise 40-45 per cent of the cost of tour packages designed for the international tourists visiting India and this is higher than the tax component in tour packages of European and South-East Asian nations. We expect the new government at the Centre to bring down the tax component to 15 per cent", Vijay Thakur, president, IATO told Business Standard.

"Moreover, luxury tax should be levied on the actual tariff of the hotels and not on the printed tariff. This apart, there should be uniformity in luxury tax and service tax in all states of India", he added.

He pointed out IATO is going to approach the new government at the Centre soon with its recommendations focussed on the issues of taxation and infrastructure development for the tourism sector in the country.

IATO feels that the new government should work towards development of external infrastructure like roads, electricity and water supply for the upcoming hospitality projects, especially in the Delhi and NCR keeping in view the Commonwealth Games to be hosted by Delhi in October 2010.

According to industry estimates, 30,000 hotel rooms were needed in Delhi and NCR for the Commonwealth Games in 2010.

Meanwhile, IATO was in the process of organising roadshows in different overseas destinations for promotion of India's tourism products and attracting the international tourists. These roadshows were being held by IATO in different countries after the Union tourism ministry declared 2009 as the Visit India Year.

IATO has already organised roadshows in Australia, Singapore, Malaysia, UK and Ireland. More roadshows were in the offing in US, South America and the eastern European countries in the next few months.

Besides, IATO is also in the process of training professionals engaged in tourism and hospitality sectors in the country.

The training to the professionals is imparted in the form of seminars and workshops which are conducted in various locations of the country.

IATO is organising two to three seminars every month and each seminar is attended by 60-70 participants.

IATO has already trained over 800 professionals so far and the tour body plans to train about 1,000 more professionals by the end of 2009-10.