Tour Operator – Legal Compliances

Last Updated at: Nov 23, 2020
In November, 2020, FICCI Tourism Committee members submitted key recommendations for the survival of the Indian tourism industry. These recommendations include payment of the SEIS (Service Exports from India) Scheme due to the tour operators for the financial year 2018-2019 and extending the moratorium for another 1 year. The Committee members also urged the Government to create a separate Tourism fund under the Ministry of Tourism and offer bailout packages to support the salaries in the Tourism and Hospitality Sector in this time of crisis. 


Tourism is evolving as one of the largest industries in the recent years in India. Therefore, there are so many people who are finding their employment in the tourism sector. According to the United Nations World Tourism Organization (UNWTO), the tourism sector provides 6-7 percent of the world’s total jobs directly and even more indirectly through the multiplier effect. The tourism sector in India is estimated at USD117.7 billion in the year 2011 and is estimated to increase to USD418.9 billion by the year 2022. So, there are so many opportunities for the new entrepreneurs who are starting their career in the tourism sector as tour operators.

Type of Business Entity

Tour operators these days have many preferences of business entity to choose from and the business strategy for the endeavor would play a significant role in finding the right fit. Most of the tour operators choose to have a Private Limited Company as it is one of the extensively used and acknowledged forms of business in India contributing lot of benefits. A private limited company is undeniably the best for the entrepreneurs who have ideas to offer online services and rapidly gauge up their business by using the power of the internet.

Business entities like Limited Liability Partnership (LLP) or One Person Company (OPC) would be best for the entrepreneurs who have plans to build their business steadily without any hurry.

GST Registration

The services provided by a tour operator are taxable under GST. So, the tour operators are required to acquire a GST registration. However small-scale tour operators need not pay GST if the cumulative turnover of taxable services does not exceed Rs.20 lakhs in the financial year. It is mandatory for businesses to register for GST, with a turnover of more than Rs. 20 lakhs (Rs.10 lakhs for northeastern states) annually.

GST Registration can be done online by registering your business on the official GST portal and then scan and upload all the required documents.

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Becoming a Tour Operator approved by Government of India

Though registration as a Government of India approved Tour Operator is not necessary, it is valuable and provides acknowledgment for the tour operator. The main ambition and objective of the scheme for recognition of tour operators are to reassure quality standards and services in the tourism sector. For becoming a tour operator recognized by Government of India, the tour operator must fulfill certain prerequisite on the capital invested, number of employees, maintenance of minimum office space and other requirements. Further, an application must be made to the tourism ministry in the mentioned format to become a Government of India approved Tour Operator.

IATA Operator

The International Air Transport Association (IATA) is the trade association representing major air traffic in the world. IATA offers wide-ranging training and professional development services for tour operators, and IATA authorization is a very important seal of approval acknowledged worldwide. Therefore, it is essential for a tour operator to consider becoming IATA members and enjoy access wide range of benefits.