GST adversely affected tourism sector in J&K

As per a recent report by a parliamentary panel, the Goods and Services Tax (GST) introduced by the Center has a negative impact on the tourism sector of Jammu and Kashmir. The panel suggests reconsidering the indirect tax system in the tourism related activities of the state.

The committee was headed by Rajya Sabha member Kanwar Deep Singh, who expressed concern at the declining tourism in the picturesque State, has asked the Government to hold talks with the countries which have issued advisories against travel to J&K.

“It (GST) must be done in a cautious and phased manner in order to ensure that the delicate State of tourism in the region is not adversely affected,” said the report on Development of Tourism in Jammu & Kashmir which was submitted in Parliament recently.

“Unlike other states, residents of Jammu and Kashmir and its business owners spend huge amounts of money on procuring essentials, most of which have to be flown in, which increases their capital expenditure,” the report reads.

“The sensitive nature of Jammu and Kashmir must be taken into consideration during the development of tourism in the region. The implementation of GST on tourism in the region will have manifold effects, mostly negative on its economy”, the committee said.

“Furthermore, the committee was informed that small business owners for small scale hotels, bed and breakfasts and home stays cannot list their properties on various travel intermediary websites as there is a levy of an 18 per cent of GST, which cuts across the little profit that they might make, making their venture unsustainable,” said the report.

“In this regard, the committee recommends that the implementation of Goods and Services Tax on tourism-related activities in the state must be reconsidered. It must be done in a cautious and phased manner in order to ensure that the delicate state of tourism in the region is not adversely affected”, the panel said, adding the ministry of tourism must initiate dialogue with the finance ministry in this regard.

The panel also recommended that the tourism ministry organize its own publicity campaign “in order to remove the negative impression of the state which is based on incorrect facts”.

Furthermore, the State Government must engage with business chambers such as ASSOCHAM, CII and FICCI to invite and encourage companies to host meetings and visits in the region, it said.