What will be the impact of VAT on the tourism industry?
The impact will depend on the present impact of State sales tax on the industry. The luxury tax on room rents is not governed by sales tax Acts and VAT will not impact the luxury tax. VAT may impact the F & B division of the hospitality industry. Food and Beverages are subject to State sales tax at present. They will be covered by the VAT provisions or single point tax as at present may be levied under the VAT Act. One has to refer to the respective State VAT Act for the impact.
