A NEW and sudden directive from India's income tax authorities requiring travel consultants to report all customer payments exceeding Rs100,000 (US$1,671) within a month from transaction has put the trade in a dilemma.
Travel consultants TTG Asia e-Daily spoke to feel that the July 1 order, which covers cash, cheque and credit card payments, will upset customers who do not want such information being passed on to the Income Tax Department.
Sajan Gupta, managing director of Vayu Seva Tours Kolkata, lamented: “We will lose business if we insist on passing on client details. It is a breach of client confidentiality. Now clients will spread the business, buying four tickets from four agencies to keep each invoice below Rs100,000.”
Syrisa Travels Mumbai’s director, Sonal Swamy, predicted that this would put brick-and-mortar travel agencies at a disadvantage: “Corporate clients will stop booking through us and start buying online as it is not binding on airlines and online portals to pass on similar information.”
Some travel consultants believe an alternative is to separate a purchase into several invoices to circumvent the law.
TTG Asia e-Daily understands that reasons for making reporting transactions compulsory include identifying untaxed transactions and preventing the inflated invoicing of travel concessions for government employees.
A similar directive was issued in 2011 for cash payments but was rescinded after the Travel Agents Association of India (TAAI) voiced concerns.
Iqbal Mulla, president of TAAI at the time, commented on the present situation: “Instead of targeting travel consultants, tax authorities should seek these details from IATA’s Billing and Settlement Plan…every sale across the world is recorded there.”