Tourism, Shipping ministries moot GST exemption to revive cruise tourism

The ministry of tourism and the ministry of shipping have jointly decided to move a proposal to the ministry of finance to exempt cruise tourism from Goods and Services Tax (GST). At present, travellers have to pay 18% GST on cruising and availing on board hospitality.

Confirming the move, tourism minister KJ Alphons says, “I had an elaborate discussion with (minister for road transport & highways, shipping) Nitin Gadkari. We have decided to jointly seek a complete exemption on GST.”

The concern stems from the fact that cruise tourism, which is at the nascent stage in India, has received 9% less passengers in 2017-18 as compared to 2016-17.

The all India data, that HT accessed from the five operational ports – Chennai, Cochin, Mumbai, New Mangalore and Goa – shows that 1,91,725 travellers arrived or departed from 158 ships in 2016-17.

In 2017-18, the number of passengers went down to 1,75,636 with only 137 ships visiting Indian ports.

“I firmly believe that GST exemption will increase the numbers substantially. Cruise tourism is one area where we can make a dramatic difference and make it a $10 million business. The current business is very small,” Alphons says, adding that top tourism destinations such as USA, UK and Germany don’t levy any tax on cruise tourism.

He suggested a slew of other measures which both the ministries have decided to take up to promote cruise tourism.

“We are in talks with the top international players and have invited them to make India a home port for their vessels. At present, only one ship starts its trip from Mumbai port and comes back to port here after finishing it,” he says.