Though it is true that the depreciating rupee value is a primary cause that greatly increased the prices of the foreign tours, right from flight tickets to the foreign exchange, there is also an additional factor that hikes the prices even further. The travel agents, from 1 July, have announced that they would levy an additional 3% tax on sightseeing tickets, Hotel booking, taxi and other associated arrangements for a pleasant holiday abroad as a service tax.

There was a service tax only on the air tickets prior to 1st July. The service tax net has is now applicable in newer areas thereby increasing the total fare of the journeys. Benson Samuel from Riya Travels in Delhi said “The prices have been affected. A singapore tour, on twin-sharing basis with accomodation at a three start hotel, has gone up from Rs. 20,976 per person to Rs. 22,013. Similarly for the Switzerland Towns of Lucerne and Interlaken has gone up from Rs 38,924 to Rs 40,848 per person on a twin sharing basis.”

Mohit Gupta, Chief Business Officer at Make My Trip has said that the 3% straightforward tax on non-air travel component couldn't have come at a worse time.

AW- Anil