The Telegraph
Friday , June 22 , 2012
Since 1st March, 1999
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Tour agents to get tax lessons
- Sikkim tourism sector seeks waiver till 2013

Gangtok, June 21: Central tax officials have decided to train the stakeholders in the tourism sector in Sikkim on maintenance of accounts on June 27, prompting associations of hotel owners and travel agents to declare that they are ready to pay service tax from the next year.

The Joint Action Committee, an apex forum of associations of tourism stakeholders, however, today reiterated the demand that an exemption be granted to the Centre’s 2010 directive which said the service tax would be applicable to the Northeastern states also with retrospective effect from 2006.

“Our request to impart training in the maintenance of account books has been considered by the Union finance ministry. The office of the commissioner, central excise, customs and service tax headquarters, anti-evasion unit, Siliguri, will give the training to tour operators and hoteliers at Janta Bhavan in Gangtok on June 27. The training will help us maintain proper account books and pay service tax from 2013,” said Luckendra Rasaily, the president of the Travel Agents’ Association of Sikkim, a constituent of the committee.

The Sikkim Association of Adventure Tour Operators, and Sikkim Hotels and Restaurants Association are also members of the committee that was formed last year solely to address the issue of service tax payment.

The Lok Sabha and Rajya Sabha members from Sikkim had also written to the Union finance minister stating the negative consequences of the service tax in Sikkim where “tourism sector supports almost 60 per cent of the population”.

“The central directive says a hotel whose tariff exceeds Rs 1,000 per night for a room has to pay a service tax of 5.15 per cent on the gross annual income, while a travel agent with an yearly profit of Rs10 lakh will have to shell out 10.30 per cent of the amount as tax,” said a travel agent.

The committee today said it would not pay the service tax with retrospective effect from 2006. “As the tourism stakeholders haven’t kept proper books of accounts so far and are unaware of the source of tax deduction, we will not pay with retrospective effect from 2006,” said S.B. Subedi, the chairman of the committee.