The Goods and Services Tax (GST) has hit Kerala’s tourism industry with the growth rate of tourist arrivals going down last year after the implementation of the new tax regime, the state government said today.
The Kerala government, however, said it was hopeful that things would improve in the coming days in view of the recent changes in the tax rates applicable to the hospitality sector.
Though there was an increase in the inflow of tourists as per the statistics available up to September last year, the growth rate showed a decline from August onwards after the implementation of the Goods and Services Tax (GST), it said.
“GST has definitely affected the tourism industry in Kerala. We hope that with the changed GST rates for the hospitality sector, things would improve in the coming days,” Tourism Minister KadakampalLy Surendran told reporters here.
In the first major revision after the new tax regime came into force on July 1, 2017, the GST Council in November last lowered the tax rate to a uniform 5 per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones. It had also fixed 18 per cent tax rate for restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff.
Surendran said the total arrival of domestic tourists in the state upto September, 2017, stood at about 1.02 crores, an increase of 11.23 per cent compared to 2016. However, for August and September the growth rate was 9.12 per cent and 5.29 per cent respectively, which was lower compared to the overall average of 15 per cent to 19 per cent for the first seven months of 2017, he said.
Similarly, the number of foreign tourists arrivals in the state up to September stood at 7,69,772, a growth of 4.23 per cent. During August and September, the growth rate was minus 9.05 per cent and minus 12.62 per cent respectively.
He said Guruvayur in Thrissur district, where the famous Sri Krishna temple is situated, is one of the preferred destinations for domestic tourists. Foreign visitors mainly focused on the state capital Thiruvananthapuram and Ernakulam district, where the “Queen of Arabian Sea” Kochi and several other attractions are located.
On the new tourism policy announced by the CPM led LDF government recently, Surendran said steps had been taken to implement the schemes one by one. Among other things, the policy envisages setting up a new tourism regulatory authority to oversee tourism activities and check unhealthy trends in the sector.
Another plan was to make destinations plastic-free within a span of three years. The policy also proposed setting up a total of 1,000 additional classified homestays. It plans a rating system to ensure quality of resorts, hotels, and homestays.
Besides, it also lays emphasis on implementing projects on a public-private partnership basis in select destinations.