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With 5% VAT from January 1, trips to UAE to cost more
December 27, 2017, 5:17 pm

A trip to United Arab Emirates — with its emirate of Dubai being one of the most popular foreign destinations for Indian travellers — will cost 5-7% more from the New Year. Due to its dwindling oil fortunes and weakening economy, UAE will levy VAT at 5% from 1 January, 2018, on a majority of goods and services including hotels, sightseeing tours and car hires.

"Accordingly, tour costs to UAE will increase by 6% to 7% due to the 5% tax and compliance cost that businesses will incur. Dubai is the biggest draw for outbound Indians and they, too, will have to pay more," said Anil Kalsi of Delhi-based Ambe World Travels.

"Even if we had confirmed bookings earlier for any service, 5% VAT will be applicable on services rendered in UAE from 1 January, 2018.... We are in the process of sending amended invoices with 5% VAT for services already confirmed and invoiced. We request you to inform your guests in advance," says a mail circulated among tour agents in India by a leading travel distributor.

With UAE, especially Dubai, being a huge draw for Indian travellers , big travel companies have said they will try to minimise the impact of the enhanced cost for end users.

Karan Anand of Cox & Kings Ltd said: "The cost of a UAE holiday will rise marginally. Rhis has been factored in by travellers who plan to visit the Emirates. However, this will be offset by holiday offers we have lined up for Indian travellers who plan to celebrate the New Year, or travel for the Dubai Shopping Festival.... The UAE has been an attractive destination for Indians, and this year, Indian arrivals to Dubai crossed one million."

Just how big a draw UAE is for Indians can be gauged from the fact that of the 5.3 crore international travellers in 2016, 1.8 crore—over one-third of the total—had travelled between India and UAE. Mumbai-Dubai, followed by Delhi-Dubai were the two busiest international routes to and from India.

While many of those were flyers taking connecting flights from UAE's mega hubs like Dubai and Abu Dhabi, a majority of the 1.8 crore were flying between India and UAE.

Source: Times of India

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