The government had defended the move, citing concerns about addiction. The Revenue Secretary said the industry has stabilised, but it is early to make conclusive remarks.
The GST Council at its meeting on Saturday decided to exempt the GST on overseas vessels if they undertake cruises on India’s coastal route during the tourist season.
Finance Minister Nirmala Sitharaman said that the decision has been taken in order to promote tourism.
Normally, a GST of 5 per cent is levied but it has been decided to exempt foreign going vessels from IGST if they switch temporarily to the coastal run in the country, she added.
This normally happens during the winter months when the cruise vessel season for tourism peaks.
This would benefit tourism in Maharashtra, Gujarat, Goa and down to Kochi.
Besides, the Eastern Coast would also benefit, the Finance Minister said.
She explained that these foreign going vessels are exempt from duty when they are on overseas routes and this has been extended to Indian routes as well in order to give them an incentive to cater to the tourism sector.