GST Impact on Tourist Houseboats in India

Alappuzha is the famous tourist place and according to tourism department data, more than 60,000 Indian tourists have been to Alappuzha for a visit in last season. The backwater tourism industry is suffering due to new indirect tax provisions which had shattered the hospitality industry heavily. The tourist administrators suggest that due to GST implementation, there is approximately 30% downfall in domestic tourist in this season.

Although the houseboat industry got some relax after recently revised slab rate to 5% instead of 18% and 28% after the critical protest and public demand, still the impact of GST on various spendings has resulted in scaled-up expenses. T.G. Raghu, Alappuzha Tourism Development Cooperative Society (ATDC) said in a statement that the most of the visitors were domestic tourists during the peak season visit.

All tax concessions provided by state government to spread awareness are scrapped now by the GST implication. K. Jayavijayan, All Kerala Houseboat Owners’ Association (AKHOA) mentioned in a statement that they did not raise the tariff after the GST rollout.

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He further mentioned, “Most of the houseboats except corporate companies here have not registered in the GST tax system,” he said. “The tourism in Kerala, especially in Alappuzha, is moving at snail pace for last several months now. We’ll discuss this with the finance minister T.M. Thomas Isaac.”

The houseboat sector which is in a troubled situation is trying to exist in the market against Sri Lanka houseboat Industry. As Sri Lanka provides all the amenities what Kerala facilitates its tourists. The tour operators suggest that due to many reasons the fallback of international tourist to Kerala is increasing and it will be continuing further.

Talking about the Alappuzha region, around 1,200 houseboats are situated or connected to the Vembanad Lake. The reason for the slowdown of tourist is initiated after demonetization, says Tomi Pulikkattil, a houseboat owner. He further said, “The bookings have come down substantially. With GST and demonetization, the flow of money has stopped, hitting over 5,000 employees.”