The stakeholders of the tourism industry are jittery over the inclusion of houseboats, the mascot of Kerala Tourism, in the luxury tourism slot of Goods and Services Tax (GST), which entails a tax of 28%.
Operators of houseboats and tour operators are worried over losing tourists as a three-fold increase in tariff has come into effect.
The decision has rocked the houseboat industry that is passing through a rough patch following a slump in MICE (Meetings, Incentives, Conferences, and Events ) tourism as a result of curbs on liquor and stiff competition from Sri Lanka.
Compounding the problems, a tourist booking a houseboat through an approved tour operator will have also to pay an additional 5% GST. The total GST for a houseboat ride made through a tour operator will be 33%.
Till December, houseboat operators were collecting a service tax of 5%. From January to June 30, the tax collected was 9%, which was on a par with tax collected from tour operators.
“We are having a lean off-season. The 28% GST has made the tourism product expensive. It will further drive away those interested in taking a cruise,” former president of the Kerala House Boat Owners Federation V.C. Zachariah told The Hindu on Friday.
The houseboat operators took up the issue with the tourism authorities and pointed out its impact on the sector.
Minister’s help sought
They sought the intervention of Finance Minister T.M. Thomas Isaac to include the sector in the tour operator category.
As houseboats had not been specifically mentioned on the GST list, confusion prevails among the operators on the tax to be collected and on future bookings.
President of the Association of Tourism Trade Organisations India P.K. Anish Kumar said the authorities should intervene to save a niche product of Kerala and end multiple taxation for houseboats. The State has 1,200 houseboats.
As many as 500 more houseboats are to be launched as part of a roadmap to increase foreign and domestic tourist arrivals and generate four lakh new jobs in the sector by 2021.
