T extolling the virtues of tourism as a major engine of growth and employment generation and overjoyed to learn that the government intended to move Tourism into "Mission Mode." Industry stakeholders were confident that the tourism industry, which accounts for 5.8 per cent of the country's GDP and contributes 178 billion USD to the economy, was finally poised to get due recognition and some tangible support from the government. But there is much of a slip between the cup and the lip, and as soon as the hike in TCS rate from 5 per cent to 20 per cent was proposed, the positivity vanished. he industry was delighted to hear the finance minister
So why this hue and cry?
TCS is only applicable to outbound travel transactions and we have domestic travel, a very large chunk of it to cater to. "Dekho Apna Desh" is the new mantra, look inward and grow! With all due respect, the domestic travel opportunity is holistically huge on face value, but a very large chunk of it falls under religious, pilgrimage, and VFR categories where the role of the travel agent is completely missing in the value chain or hitherto performing a very limited role.
Yes, there is a domestic corporate and business travel market and also a market for domestic leisure and the agents are already handling that. The point to be noted here is that outbound travel is the other major half or more of any travel agent's business mix and accounts for more than half his revenue and earnings. A hike in TCS rates affects this outbound business by loading the expense outlay of a customer who in all likelihood is already a taxpayer paying advance tax or TDS on his salary or income.
This story is from the TTJ April 2023 edition of Travel Trade Journal.
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This story is from the TTJ April 2023 edition of Travel Trade Journal.
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