Chennai: At a time when tour operators are flagging the transfer to levy 20% tax collected supply (TCS) on abroad tour packages, ambiguity prevails over whether or not overseas forex and pay as you go foreign exchange playing cards bought in authorised full fledged cash changers (FFMC) and foreign exchange sellers can even appeal to the tax.
At current, overseas forex and pay as you go foreign exchange playing cards as much as Rs 7 lakh accessed via these RBI-authorised services for worldwide journey is out of the purview of TCS.
International change sellers have raised concern over the dearth of readability on whether or not TCS of 20% can be utilized underneath the liberalized remittance scheme (LRS) efficient from July 1. Bhaskar Rao P, managing director of Orient Change and common secretary of All India Cash Changers and Cash Switch Brokers Affiliation, mentioned, no particular clarification has been supplied for small worth transactions involving overseas forex money and pre-paid foreign exchange playing cards.
“International forex and pay as you go foreign exchange playing cards are broadly utilized by people travelling overseas for leisure journeys and employment. If that is introduced underneath the ambit of TCS, then travellers will find yourself paying extra on availing worldwide currencies and vacationer journey playing cards, notably affecting the decrease center lessons and people travelling for abroad employment,” he mentioned.
A tax knowledgeable informed TOI that tax assortment at supply would apply to overseas change playing cards as effectively, and the RBI is prone to challenge a notification clarifying this.
An estimated 5,000 to 7,000 FFMCs operat in India, facilitating cash change of over $10 billion yearly.
Rajiv Mehra, president of Indian Affiliation of Tour Operators (IATO) mentioned, levying 20% TCS efficient from July 1will adversely have an effect on Indian firms. “Increased TCS will set off individuals to e-book abroad tour packages via worldwide companies on-line to maintain the tax at bay. This is not going to solely hit the Indian tour operators but in addition income to the federal government as a result of the latter is not going to get 5% GST and current 5% TCS on abroad tour packages since all of the transactions will occur within the overseas locations,” he mentioned. This may have a bearing on employment within the tourism sector, he added.
Mohit Kabra, group CFO, MakeMyTrip, the Rs 7 lakh exemption needs to be prolonged for tour packages additionally. “That is the necessity of the hour since it could profit the primary time travellers, who typically choose a vacation spot in Southeast Asia and the general worth of the tour bundle shall be much less,” he mentioned.
Throughout the pre-Covid 12 months of 2019, almost 2.7 crore Indians travelled abroad for outbound tourism, as per the information of the Union tourism ministry.
At current, overseas forex and pay as you go foreign exchange playing cards as much as Rs 7 lakh accessed via these RBI-authorised services for worldwide journey is out of the purview of TCS.
International change sellers have raised concern over the dearth of readability on whether or not TCS of 20% can be utilized underneath the liberalized remittance scheme (LRS) efficient from July 1. Bhaskar Rao P, managing director of Orient Change and common secretary of All India Cash Changers and Cash Switch Brokers Affiliation, mentioned, no particular clarification has been supplied for small worth transactions involving overseas forex money and pre-paid foreign exchange playing cards.
“International forex and pay as you go foreign exchange playing cards are broadly utilized by people travelling overseas for leisure journeys and employment. If that is introduced underneath the ambit of TCS, then travellers will find yourself paying extra on availing worldwide currencies and vacationer journey playing cards, notably affecting the decrease center lessons and people travelling for abroad employment,” he mentioned.
A tax knowledgeable informed TOI that tax assortment at supply would apply to overseas change playing cards as effectively, and the RBI is prone to challenge a notification clarifying this.
An estimated 5,000 to 7,000 FFMCs operat in India, facilitating cash change of over $10 billion yearly.
Rajiv Mehra, president of Indian Affiliation of Tour Operators (IATO) mentioned, levying 20% TCS efficient from July 1will adversely have an effect on Indian firms. “Increased TCS will set off individuals to e-book abroad tour packages via worldwide companies on-line to maintain the tax at bay. This is not going to solely hit the Indian tour operators but in addition income to the federal government as a result of the latter is not going to get 5% GST and current 5% TCS on abroad tour packages since all of the transactions will occur within the overseas locations,” he mentioned. This may have a bearing on employment within the tourism sector, he added.
Mohit Kabra, group CFO, MakeMyTrip, the Rs 7 lakh exemption needs to be prolonged for tour packages additionally. “That is the necessity of the hour since it could profit the primary time travellers, who typically choose a vacation spot in Southeast Asia and the general worth of the tour bundle shall be much less,” he mentioned.
Throughout the pre-Covid 12 months of 2019, almost 2.7 crore Indians travelled abroad for outbound tourism, as per the information of the Union tourism ministry.
