Indian travel agents and tour operators are bracing for costlier Maldives packages as the island nation extends its 17 per cent Tourism GST to overseas sellers of Maldives holidays from October 1. The trade is divided on how much the change will add to the bill.
The Outbound Tour Operators Association of India (OTOAI) has urged the Maldivian government to withdraw the levy, which applies to overseas tour operators, travel agents and booking platforms. “We believe an additional 17% tax on overseas travel trade could unintentionally make the Maldives less competitive,” OTOAI President Himanshu Patil said. He also asked Male to work with international trade bodies and Maldivian industry groups such as MATATO and MATI on a “practical solution”.
The amendment to the Maldives GST Act, passed by Parliament on August 23, brings “inbound tourism products” (stays, meals, transfers and activities) sold by businesses with no fixed place of business in the Maldives into the tax net. A guide published on September 11 by the Maldives Inland Revenue Authority (MIRA) says the tax is charged not on the full package price but on the seller’s margin: the difference between what it collects and what it pays a GST-registered supplier such as a resort. There is no registration threshold. Airfare and other non-Maldives components are excluded, and agents who only charge a booking fee pay tax on that fee.
In MIRA’s own example, a UK operator buys a six-night resort package for USD 2,457 and sells it for USD 3,194.10. The GST payable is USD 107.10, about 3.4 per cent of the selling price by TTI’s calculation. Returns and payments must be made in US dollars, monthly for larger suppliers and quarterly for others.
The guide also addresses OTOAI’s concern about contracted bookings. GST applies only where the “time of supply”, the earliest of invoicing, full or partial payment, or three days after the service, falls on or after October 1. Bookings invoiced or paid, even partly, before that date are outside the tax even if the stay is later. A stay beginning in September but invoiced after October 1 would be taxed.
Rajat Sawhney, CEO, Rave Tours & Travels said, “Maldives is already a premium destination with relatively high package costs and the additional 17% surcharge will add considerably to the overall cost of a holiday.” He said the impact on high-end luxury travellers could be limited, but the mid-range segment, where pricing matters more could see pressure on demand as travellers turn to better-value beach destinations. The increase is substantial and cannot realistically be absorbed by agents,” he said.
Vinay Arora, Founder, ATG Holidays said Indian agents booking resorts directly may pay 17 per cent Tourism GST on their profit and 18 per cent GST in India on the same earnings, raising the prospect of double taxation. He said most agents book through Maldives-based DMCs, whose costs will also rise, and that wholesale rates are likely to increase. “Indian travel agents cannot absorb this additional cost,” he said, adding that price-conscious travellers may look at Bali, Vietnam, Sri Lanka and Thailand, which offer easier visas and better pricing for agents. MIRA’s guide does not carve out purchases made through local DMCs and does not address Indian GST.
Jyoti Mayal, Chairperson, Tourism & Hospitality Skill Council (THSC) said the tax applies only to the travel agent’s markup and estimated a “modest 2 per cent to 5 per cent” rise in retail prices. She said agents are absorbing the tax on some pre-booked peak-season stays to honour agreed rates but passing it on in new quotes. Price-sensitive mid-market and family travellers are shifting to Bali, Thailand, Sri Lanka, Vietnam and Mauritius, she said, while ultra-luxury and honeymoon bookings remain largely unaffected.
Priyank Jain, Founder, Travwalky said the tax is only part of the picture. “The Maldives has become expensive and the change in taxes is only one part of it. Airfare has gone up and the geopolitical situation is adding to the uncertainty,” he said. Whether a booking is affected depends on the client’s budget, he said, with some going ahead and others shifting. He added that the upcoming season, including honeymoon and leisure travel, could also feel the effect.
India sent 131,625 visitors to the Maldives in 2025, according to Visit Maldives data, and 74,173 had arrived by August 10 this year. Male has set a target of 2.5 million arrivals for 2026. The tourism GST rate itself rose from 16 to 17 per cent on July 1, 2025, and the October change extends the existing framework to overseas sellers.
The gap between the headline rate and the effective cost is where the debate lies. On MIRA’s illustration the added cost is a few per cent of the package, but agents point to thin margins, compliance work and a market already sensitive to airfares. With the winter peak ahead, the trade wants clarity and time from Male. If the additional cost lands on new quotes, price-sensitive Indian travellers, especially in the mid-market, will be the ones deciding whether the Maldives still stands out against Bali, Thailand and Sri Lanka.