The Travel Agents Association of India (TAAI) wrote a letter to the finance ministry regarding the abolishment of TCS.
“The subject of TCS was differed by your Ministry in the month of June 23 and was to be effected from 1st October 23 to 20% on overseas tour packages to be levied by the remitter. As per our understanding and as per circular no 10 of 2023 dated 30th June’23 5% TCS would be levied upto packages of Rs. 7 lakh and any incremental amount thereon of the package cost, TCS @ 20% shall be applicable,” TAAI said in their letter.
Moreover, they explained that the challenges faced by TCS are huge and a lot of business is getting diverted to overseas tour operators operating out of India which is directly impacting the revenues to the exchequer of India on Income Tax by Travel Agents/Tour Operators, GST as well as hitting on the livelihood of Indian Tour Operator companies doing business of outbound tours. Due to this the Indian Tour Companies have become less competent as compared to operators working outside of India who save on 5% GST and the TCS (5 to 20%) and have no registration in India. Also, the risk of these overseas companies shall also impact the passengers at large as the quality and sustainability of these companies when services are not delivered as desired by the passenger or frauds may occur.
They wrote that in the matter of TCS they have previously requested the Ministry for abolishment of TCS as a whole on overseas tour packages. Currently RBI/Banks are not equipped to maintain and monitor the limits of Rs. 7 Lakhs per traveller and there is no mechanism to track the same. There is still ambiguity on the payments made for such packages through credit cards overseas.
