Goa’s Industry body slams the 2% fee in draft tourism bill

Goa’s tourism sector has been in a flux for some time now. And, the recent shoddily put together draft Goa Tourism Promotion and Management Bill, 2024, which has been put up on the tourism ministry’s website for feedback, is creating more confusion among the operators in the sectors.

One of the proposals stuck in the Travel and Tourism Association of Goa’s (TTAG) throat is the 2 per cent tourism development and sustainability fee on every invoice of a “tourism unit”. The industry lobby believes the proposed levy will add to their already high costs and adversely impact their competitiveness.

Opposing the irrational charge, the travel body in its letter addressed to the State Tourism Minister Rohan Khaunte, Chief Minister Pramod Sawant and the tourism secretary, says the industry was already been shelling out high taxes and cesses, and therefore the new levy was uncalled for.

It also pointed out that a fee cannot imposed in “percentage form”

“The tourism industry is highly taxed. The Central government by imposing the GST tax has very clearly provided that all the other taxes and cesses would be done away with and replaced by one tax. Therefore, the GST would include within it the provision for taking care of the financial burden of the Tourism Board (set up for planning and managing tourism in Goa),” states the TTAG’s mail shot off to the government.

The industry body is of the view that the current framework of the tourism department takes care of all the levies and so there was no need for a non-budgetary provision of the tourism development and sustainability fee.  

The travel representative organisation revealed that, as per its informal survey, the tourism and hospitality industry paid around Rs2,500-plus crore in indirect taxes such as GST (SGST, CGST and IGST), VAT and Excise.

Apart from this, local bodies like panchayats, municipalities and CCP impose heavy exorbitant waste management fees per room, trade taxes and signboard taxes.

A TTAG official told Gomantak Times Digital the cumulative taxes and levies borne by the industry came to around 35 per cent of their total revenue.

“Such levies should be announced in the Budget. So many levies are already being charged to us; if you add it all up it comes to more than 35 per cent. It does not make sense,” he lamented.  

Citing examples of exorbitant taxes and levies, the industry body informed; “Calangute and Candolim Panchayat levies a charge of Rs6200 and 8800 per room as trade tax and waste management plus an additional charge of trade tax or waste management on restaurant services. There are fees being charged by the Pollution Control Board (too)”.

According to them, currently no other tourism destinations in India, including Kerala and Rajasthan – their main competitors in the inbound market – levy the fee.

“We would request that the Tourism Board be funded through the above taxes generated or paid by the industry. Existing budgets of the tourism department could be studied and rationalised in lieu of levying the above fee,” states the TTAG note.

Further, they expressed fear over the method and management of the Tourism Development Fund, to which fees collected would be credited to.  “There is no definition or provision for constituting such fund (Tourism Development Fund). In any law creation of fund or defraying of expenses upon has to be constituted by enactment of a law with provisions of how the funds will be dealt with,” points out the TTAG statement.