Government Rules for Setting Up a Travel Agency

8/10/2019 Government Rules for Setting Up a Travel Agency

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Government rules for setting up a

travel agency/ tour operation

business !!!


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The aims and objectives of the scheme for recognition of Travel Agent / Agency (TA)

are to encourage quality standard and service in this category so as to promote tourism

in India. This is a voluntary scheme open to all bonafide travel agencies to bring them

in organized sector.

The application for approval shall be addressed to the assistant Director General,

Travel Trade Division, Ministry of Tourism, Government of India.

The inspection for first approval/renewal or extension shall be conducted by the

Inspection team within a period of 60 working days from the reciep of the complete

application.

TA would be required to pay a non-refundable fee of Rs.3, 000/- while

applying for the recognition and renewal of Head Office as well as each Branch

Office. The fee would be payable to the Pay and Accounts Officer, Ministry of

Tourism, in the form of a Bank Draft.


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Conditions to be fulfilled by TA for

recognition :


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1] The application for grant of recognition /

renewal or extension shall be in the prescribed

form and submitted in duplicate along with therequired documents.


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2] TA should have a minimum Paid up Capital

(Capital employed) of Rs. 3.00 lakh for rest of

India and Rs. 50, 000/- for the agencies located

in the NorthEastern region, remote and rural

areas duly supported by the latest audited

Balance Sheet / firms Statutory Auditors

certificate.


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3] TA should have been in operation for a

minimum period of one year before the date

of application.


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4] Infrastructural and financial requirements

The requirement for this regard includes the following investments :

Buying or hiring office space

Office furniture and furnishing

Communication equipments [xerox, fax, telephone, computers]

Salaries for the staff

Office materials [files, promotional brochures etc]

According to MoT, The minimum office space should be at least 150 sq. ft for

rest of India and 100 sq. ft for hilly areas which are above 1000 meters from

sea level. Besides, the office may be located in a neat and clean surrounding

and equipped with telephone, fax and computer reservation system etc.

There should be sufficient space for reception and easy access to toilet

facilities.


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TA should be under the charge of the Owner or a full time member who is

adequately trained, experienced in matters regarding ticketing, itineraries,

transport, accommodation facilities, currency, customs regulations and

tourism and travel related services. Besides this, greater emphasis may be

given to effective communication skills, knowledge of foreign languages,

other than English.

There should be a minimum of four qualified staff out of which at least

one should have Diploma / Degree in Tourism & Travel Management from arecognized University, IITTM or an institution approved by AICTE. The owner

of the firm would be included as one of the qualified employees.

The academic qualifications may be relaxed in case of the other two staff

members who are exceptionally experienced personnel in Airlines, Shipping,

Transport and PR agencies, Hotel and other Corporate Bodies and those whohave worked for three years with IATA / UFTA agencies and also those who

have two years experience with MOT approved Travel Agencies.

5] Skill requirements :


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For the Travel Agents / Agencies located in the North Eastern region,

remote and rural areas, there should be a minimum of two staff out of

which one should be a qualified employee with a Diploma / Degree in

Tourism & Travel Management from a recognized University, IITTM or an

institution approved by AICTE. The owner of the firm would be included asone of the qualified employees.


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6] TA should be approved by International Air

Transport Association (IATA) or should be

General Sales Agent (GSA) / Passenger SalesAgent (PSA) of an IATA member Airlines.


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A travel agency requires certain approvals for carrying the business and in this

regard an approval from the International Air Transport Association (IATA) which is

the World Organisation of Scheduled Airlines, is very useful. IATA has worked out

International fares and rates and uniform transportation documents (airline tickets

and airway bills) to facilitate the carriage of passengers and cargo world-wide. An

IATA approved Passenger Sales Agent is an Agent who is capable of receiving

commissions on International Air Travel documents. This commission is paid only to

approved Agents.

To apply for IATA approval, an application has to be submitted, by filling out the

requisite forms, and sent to Sedentary, Agency Investigation, Panel No. 9(AIP-9). In

this regard the following aspects are checked:

Ability to generate and procure air passenger transportation,

Professional standing,

Financial status,

Business premises,

Staff ability and experience

A final inspection is held and the approval is given by IATA. It is worth mentioning

here that a IATA Agents get 9% commission on International air tickets and 6% on

domestic airline tickets.


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7] TA should be an income-tax assessee and

should have filed Income Tax Return for the

current assessment year.


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8] For the monuments protected under the Ancient

Monuments and Archaeological Sites & Remains Act,

1958 (24 of 1958), the TAs should deploy / engagethe services of Regional Level Tourist Guides trained

and licensed by Ministry of Tourism, Government of

India or other guides authorized by the Governmentof India or under orders of the Honble Court(s). For

other monuments and destinations, the guides

authorized under the orders of the appropriate

authority, if any, of the concerned monument /

destination should be deployed / engaged by TAs.


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9]For outsourcing any of the services relating

to tourists,the TA(s)shall use approved

specialized agencies in the specific field of

activity.


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10] In order to receive and deposit foreign

exchange earned, with a Bank the agency

should have a Restricted Money ChangersLicence (RLM-3) and proper returns must be

filed with the Reserve Bank of India every

fortnight.


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11] The Government of India gives certain

incentives and benefits to the tourism industry and

a person intending to set up a travel agency shouldbe aware of such benefits.

For example:

Under this 50% of earning profits in foreign exchange are free of income tax and the other

50% are also tax free if they are ploughed hack into the development of tourism.

The Department of Tourism gives prizes for various categories of travel agencies for foreign

exchange earnings.

The Tourism Finance Corporation of India gives loans to persons for setting up travel

agencies. The Department of Tourism, Government of India provides brochures, tourismrelated data, etc. to travel agencies for promotional purposes.

The Department of Tourism, Government of India also provides assistance to the travel

agencies for participation in tourism fairs, travel marts, and in official promotional

delegations. Generally such assistance is provided through the Travel Agents Association of

India (TAAI) and it is advisable that travel agencies should become members of TAAI


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Thank You

-Mukul

Chaudhary and

Era Sood

Government Rules for Setting Up a Travel Agency

Documents

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