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Shipping Ministry urges GST Council to keep cruise tourism out of new tax regime

In an attempt to boost cruise tourism industry, the Shipping Ministry has urged the Goods and Services Tax (GST) Council to exempt cruise tourism under the new indirect tax regime, in line with major cruising nations. It has noted that main cruising countries like UK, USA and Germany have zero rate domestic cruises. Therefore, it said that India should also have zero rating for cruise tourism as it is in nascent stage in the country and such steps will provide it a much-needed fillip.

Also, the Ministry in its proposal has mentioned that transportation of passengers (with or without belongings) by inland waterways is not a taxable service under the Finance Act, 1994 and the same rule should be applied to cruise ships operating domestically or internationally. It pointed out that cruise tourism industry is highly labour intensive, and given its strong backward linkages, it will impact the economy positively. According to the Ministry, cruise tourism can be India's economic growth engine as well as a game changer as there is a vast untapped potential.

In order to make India a global hotspot for cruise tourism, a policy is likely this month as steps are underway to expand number of cruise vessels to 700 from about 70 at present. For promoting the sector, an action plan is also on the anvil that will include key steps to bring it on par with international standards. Moreover, a slew of measures are already been taken to boost infrastructure that include building cruise terminals at five major ports-Mumbai, Goa, New Mangalore, Chennai and Cochin. Among other measures, the government has allowed cruise ships to stay for 3 days, up from the earlier 24 hours, and rules have been simplified to attract more vessels.

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