GST impact on tourism? Too early to comment says minister

Last Updated: Mon, Jul 31, 2017 18:43 hrs
Tourists relax at Anjuna beach, Goa (Reuters image)

New Delhi: It may take longer to understand the impact of the Goods and Services Tax on the tourism sector in India. Tourism minister, Mahesh Sharma said that the evaluation of impact could take time, although he pointed out that GST as a single tax system has brought down taxation levels.

The minister was responding to questions raised during a session in the Lok Sabha.

Official figures suggest tourism sector' contribution to GDP at 6.88% in 2012-13.

A single tax structure could have an adverse impact on hospitality sector according to experts, but according to the minister' admission assessment could take time.

Addressing supplementary questions he suggested that discussion with the GST council could be convened soon to understand the challenges of boat-owners in God's own country of Kerala.

A response on the awaited Incredible India 2 policy also found mention during the session. The program looks at inclusion of private sectors to promote tourism.

According to an official release, domestic tourist visits has grown by 12.7% in 2016 over 2015, while foreign arrivals have surged by 5.9%.

The ministry mooted schemes such as Swadesh Darshan (Integrated Development of Tourist Circuits on Specific Themes), National Mission for Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD), and computerization and Information Technology to uplift the tourist visits.

In a written reply, the minister also shared that tourism is a demand based concept defined not by its output but by its use. It consumes the output of various industries like Passenger Transport (Air/ Rail/Road), Hotels & Restaurants, etc. The initiatives taken by the Ministry to boost tourism in the country under various schemes would in turn benefit the various service industries by way of increasing demands and inter-alia direct and indirect employment generation.