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    Travel operators urge GST relief for mid-sized tourist vehicles

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    By News Karnataka

    Copyright newskarnataka

    Travel operators urge GST relief for mid-sized tourist vehicles

    The Karnataka State Travel Operators Association (KSTOA) has welcomed the concessional 18 per cent GST rate on small tourist vehicles under the new GST 2.0 reforms but has strongly objected to the exclusion of mid-sized SUVs and MPVs that form the backbone of the tourism sector.

    Mid-sized vehicles labelled as luxury

    According to KSTOA, vehicles such as the Toyota Innova and Maruti Ertiga are wrongly categorised as “luxury cars” and taxed up to 40 per cent. The association argued that these vehicles are in fact essential for transporting domestic and international tourists across the country. The high tax burden, they said, makes operations unviable for mid-segment travel operators while increasing fares for passengers.

    Tourism sector under pressure

    The association emphasised that tourism relies heavily on mid-sized, fuel-efficient vehicles that can handle diverse terrains and long-distance travel. Treating them as luxury items, according to operators, is not only impractical but also hampers the sector’s overall growth. “Tourism is a key contributor to the economy and employment. Taxing essential vehicles at such high rates stifles competitiveness and discourages investment,” KSTOA noted.

    Industry appeal to policymakers

    K. Radhakrishna Holla, President of KSTOA, urged the Union Finance Ministry and the GST Fitment Committee to urgently reconsider the classification. “The goal of GST 2.0 should be to deliver simple and equitable tax benefits across all sectors. The mid-segment travel industry cannot be left out,” he stated.

    He added that ignoring this segment would leave thousands of small and medium tour operators struggling to survive, at a time when the industry is only beginning to recover from past disruptions.

    Call for equitable tax structure

    KSTOA’s representation highlights the need for a balanced tax system that does not disproportionately affect smaller operators. The association said that if vehicles like Innova and Ertiga remain taxed at luxury rates, it would make affordable tourism increasingly difficult in India, as operators would be forced to pass on the costs to travellers.

    Way forward

    The association concluded by appealing for urgent intervention before GST 2.0 is finalised. By extending the concessional 18 per cent rate to mid-sized SUVs and MPVs, policymakers can ensure the tourism industry remains accessible, competitive and sustainable in the long run.

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