UAE travel will cost more from 1 January 2018 with added 5% VAT. Owing to the decline in oil revenues and failing economy, 5% VAT will be levied by UAE from 1 January. It will be applicable to most of the services and goods that includes car hires, sightseeing tours, and hotels.
Anil Kalsi of Ambe World Travels based at Delhi said that UAE travel cost will increase by 6-7% due to VAT and costs for compliance incurred by businesses. Dubai is the most favored destination for Indians traveling overseas. Thus they will also have to bear the increased costs, he added.
A leading travel distributor has circulated a mail amongst the tour agents in India in this regard. It says that 5% VAT will be applicable for services offered in UAE from 1 January. This will be applicable for even the bookings that have been confirmed earlier. The amended invoices will be soon dispatched. The mail asks them to inform their guests in advance.
UAE, specifically Dubai is a major attraction for Indian travelers. Large travel firms have said that they would attempt to reduce the effect of increased costs for end users. The statistics for overseas travel by Indians clearly highlight the importance of Dubai.
5.3 Crore Indian travelers arrived at overseas destinations in 2016. Out of this around 1/3rd or 1.8 crore traveled to the UAE. Mumbai- Dubai and Delhi-Dubai were the 2 busiest overseas routes from and to India, as quoted by the Travel Biz Monitor.
Many of the flyers were the ones taking connecting flights from mega hubs of UAE like Abu Dhabi and Dubai. Most of the 1.8 crore travelers were flying between the UAE and India.
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