Wed Oct 22 11:21:14 UTC 2025: Summary:

The Karnataka State Travel Operators Association (KSTOA) is protesting the new GST 2.0 reforms, which classify mid-sized MPVs and SUVs as luxury passenger cars, making them ineligible for the concessional tax rates offered to smaller vehicles in the tourism sector. The association argues this unfairly burdens travel operators, increases costs for passengers, and stifles tourism growth. While they applaud the tax breaks for smaller vehicles, KSTOA is urging the Finance Ministry to reconsider and extend tax concessions to mid-sized vehicles, which they consider “workhorses” of Indian tourism. A cab driver corroborated the association’s statement and said the tax reform would directly affect the driver’s earnings.

News Article:

Karnataka Travel Operators Decry ‘Grave Injustice’ in GST 2.0 Reforms

Bengaluru, October 22, 2025 – The Karnataka State Travel Operators Association (KSTOA) has launched a strong protest against the Goods and Services Tax (GST) 2.0 reforms, claiming they unfairly discriminate against mid-sized Multi-Purpose Vehicles (MPVs) and Sport Utility Vehicles (SUVs) used extensively in the tourism sector.

In a letter addressed to the Union Finance Ministry, KSTOA President K. Radhakrishna Holla argues that classifying these vehicles as “luxury passenger cars” rather than essential tourism vehicles will have severe repercussions for travel businesses across the state.

“Treating these vehicles as luxury is a grave injustice. The current tax rate of up to 40% is creating a heavy burden for operators, leading to increased costs for passengers and stifling the overall growth of the tourism sector,” said Mr. Holla.

The association is urging the Finance Ministry and the Fitment Committee to recognize mid-sized passenger vehicles as the “real workhorses of Indian tourism” and extend the concessional tax benefits accordingly.

Manjunath K.R., a Bengaluru cab driver who relies on an SUV for airport and outstation trips, echoed the association’s concerns. “Tourists prefer bigger vehicles for comfort. High taxes mean operators have to charge more, and passengers hesitate to book. If larger vehicles also get tax benefits, more drivers like me will get consistent trips and better income,” he said.

While KSTOA has welcomed the 18% concessional tax rate for smaller vehicles (below 1200cc or 4000mm in length), they maintain that excluding mid-sized vehicles from similar benefits creates an uneven playing field. The association has appealed to the Finance Ministry to urgently reconsider the policy and ensure equitable tax benefits across all segments of the travel industry.

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