Cruise ships operator Carnival UK has written to Prime Minister Narendra Modi and senior members of his cabinet, cautioning against a high tax regime that it said may destroy the cruise industry in India.

David Dingle, chairman of Carnival UK, pointed to the customs duty imposed last month on cruise ships operating between Indian cities. The new measure was put in place amid a clamour for reducing the Goods and Services Tax (GST) on the sector to make cruise tourism more attractive to Indian travelers.

“We are aware that cruise companies want lower tax regime. I have spoken to finance minister Arun Jaitley and transport minister Nitin Gadkari, among others. I am hopeful that the issue will be amicably resolved,” union tourism minister KJ Alphons told HT.

According to the Centre’s own estimate, some 174,000 Indian tourists went on cruises last year; globally 25 million travelled on cruise liners. Just one cruise ship operates from India; 169 had come to Indian shores last year.

India imposes 18% GST on cruise passengers with an additional 5% tax for reservation of cruise holidays, according to officials in the tourism ministry. The new customs duty has come on top of the GST rate, making India one of the highest taxed ports of call for cruise ships. In its letter, Carnival, which has deployed ships to India, said: “Unless (customs duty is) repealed, this instruction will lead not only to cruise companies deploying their ships away from India in the future, but also to the cancellation of currently scheduled Indian calls… the view is held most, if not all, other cruise companies,” said Dingle of Carnival UK.

First Published: Nov 05, 2018 23:56 IST