Report: Travel Companies Request a Deadline Extension After Being Unprepared For 20%TCS
Due to the lack of a suitable system, travel agencies and industry organisations are debating whether to delay the implementation of a new law that requires a 20% tax to be collected at source on international trips starting on July 1.
The TCS rate for international transfers made via the LRS has recently been increased by the government from 5% to 20%, beginning July 1, 2023. According to Joint Secretary of Revenue Raman Chopra, the tax collected at source (TCS) levy on credit card use outside of India would begin on July 1, 2023. Any money you transfer overseas is a remittance.
Additionally, the travel industries want that the Rs 7 lakh TCS threshold restriction be applied to all payment methods and travel-related services.
According to an ET report, Jyoti Mayal, president of the Travel Agents Association of India (TAAI) and vice chairperson of the Federation of Associations in Indian Tourism & Hospitality (FAITH), said: “I understand that banks are finding it difficult to calculate the TCS component as the reporting systems are not ready.”
The government has made it clear that purchases made using international credit and debit cards for overseas travel up to Rs 7 lakh would not count against LRS limits and will therefore not be subject to TCS.
However, it has also made a separate decision to triple the current TCS of 5% on overseas vacation packages, to 20% from July 1. The tax rate on medical and educational expenses abroad will continue to be 5%.
