homebusiness Newscompanies NewsLack of tech infrastructure hurdle in carrying out TCS compliance, says Tejinder Singh of Make My Trip
Lack of tech infrastructure hurdle in carrying out TCS compliance, says Tejinder Singh of Make My Trip
Tejinder Singh said that so many transactions happening in real-time in the tour and travel business cannot be monitored manually and tech infrastructure has to be made up to the mark for the same. He added that the industry was expecting TCS to be nil for the Rs seven lakh threshold instead of five percent.
A few days after the centre released the Frequently Asked Questions (FAQs) on Tax Collection at Source (TCS) on foreign remittance, the travel industry feels they are not technically equipped enough to trace the TCS declarations. Tejinder Singh, VP and head of taxes, Male My Trip Group, told CNBC-TV18, on the sidelines of the FICCI GST Conclave that the Reserve Bank of India (RBI) will have to step in to ensure that appropriate technology and infrastructure is available for the online travel industry and banks so things can function smoothly.
Singh says that the support becomes more important as sellers of tour packages will have to deduct TCS accurately otherwise they will be held as “assesses in default”. The government had earlier notified that both buyers and sellers of such packages will also have to accurately mention their forex remittances for accounting purposes.
“On the sale of overseas packages, the tour agent would be liable to collect the TCS appropriately and track it. An agent has to make sure the declaration made by the customer is true. However, the technology and infrastructure to monitor the threshold of Rs seven lakh will have to come from RBI. The absence of the technology to track threshold is a big hurdle at the moment to carry out the TCS compliance,” Tejinder Singh told CNBC-TV18.
Singh said that so many transactions happening in real-time in the tour and travel business cannot be monitored manually and tech infrastructure has to be made up to the mark for the same. Singh also said that the industry was expecting TCS to be nil for the Rs seven lakh threshold instead of five percent.
“We did expect and raise the point with the government TCS till the seven lakh threshold should be nil for both tour packages and standalone bookings till and I think it is a miss. Will continue to pursue this matter with the government,” Singh told CNBC TV-18.
The new TCS rates are applicable from October 1 instead of July 1 and the use of international credit cards while abroad has been excluded from the liberalised remittance scheme.
Singh said that the deadline is fair provided banks can get the infrastructure up and ready. He added that the industry is still making representations to the govt over two major issues, one is to make the five percent rate on travel packages nil and the second is about the time required by banks to equip themselves with the needed tech.
“In the absence of the tech with banks, it can be difficult for the industry to meet the expectations of being liable to keep a check on customer declarations,” Singh said.
First Published: Jul 3, 2023 6:00 PM IST
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