With only days remaining until the implementation of tax-collected-at-source (TCS) on overseas tour packages purchased with credit cards, industry bodies have written to the government to express their concerns, fearing that domestic travel agents will be negatively affected. Numerous industry organisations, including Ficci, Assocham, PHD Chamber of Commerce, and others, have argued that it is equivocal, citing the recent clarification that exempts debt and credit transactions of up to INR 7 lakh.
There is concern among domestic agents that they will lose business to foreign competitors who operate via travel platforms. They have argued that institutions, rather than themselves, should be responsible for monitoring compliance. In addition, agents reported that the financial sector is not prepared to implement it on July 1. However, some credit card issuers, such as SBI Card, have begun mailing cardholders under the new system. Following a meeting, they suggested in a letter to revenue secretary Sanjay Malhotra that the INR 7-lakh threshold should apply to all modes of travel, including bundles.
According to their findings, senior citizens and first-time travellers prefer packages, whereas frequent international travellers make individual reservations. In addition, they want the threshold to include all payment methods, including net banking and UPI, as well as the purchase of foreign currency and the loading of pre-paid forex cards.
Source: travelbizmonitor