How to Start Online Travel and Tourism Business in India

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How to Start Online Travel and Tourism Business in India

The travel industry is one of the fastest growing industries and India is the world’s tenth largest business travel market. Unlike earlier times now, the travel and tourism agencies are being facilitated on online portals to promote ease of booking.  Through this article,

We will look at the multiple rules, regulations and taxation issues for starting a travel agency business in India. 

Travel agency is one of the most fruitful business activities in India with the immense increase in the number of people who love to travel. The travel agents provide a variety of services including, tour booking, activities booking, hotels and arranging flight tickets. In order to start a travel agency, the entrepreneur must understand the aspects mentioned below and make decisions about it.

Obtaining government approval

In India, it is not mandatory for all the travel agencies to obtain government approval for operating their business in India.  Thus, travel agents can charge a commission to tourists even though they are not registered officially as a travel agent.  However, all the travel agents are recommended to obtain government registration as the tourists, particularly foreign ones, are interested in the credentials of the agency. If a travel agency desires to get registered with the government then he is required to file an application with the Ministry of Tourism in the required format.

Acquiring tax registration

Earlier, travel agencies were taxable under service tax and so travel agents were required to obtain a service tax registration. However, small-scale travel agents were given the option of availing service tax exemption in case the aggregate turnover of taxable services does not exceed Rs 10 lakhs in a financial year.  With the introduction of goods and service tax now the travel agencies are required to obtain GST registration and pay goods and service tax at 5% without availing the benefit of input tax credit. The rate of GST will be uniform for all services including package tours, hotel accommodation only, etc.  

Choosing the right business structure

If the travel agency desires to gain legal identity and government approval, then it is required to form itself into a corporate structure. Today in India there are multiple business structures from which the travel agents can choose the most suitable option for them. The most preferred business that travel agents choose is the Private Limited Company as it is one of the most widely used and recognized forms of business in India, offering a host of benefits.

However, for the entrepreneurs desiring to start the business solely or on the part-time basis, the business structure like Limited Liability Partnership (LLP) or One Person Company (OPC) would be ideal.

IATA agent

The trade association for world airlines is known as the International Air Transport Association (IATA).This institution offers comprehensive training and professional development services for travel agents. Being IATA accredited helps the travel agency to attain seal of approval recognized worldwide.

Registering Trademark

In today’s competitive world it is very significant to protect your brand name and logo from being exploited by competitors. Also, it helps the owner to obtain exclusive rights over the trademark.

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