Startups working their way to build a Travel Agency Product
Just to be clear, A Travel Agency (TA) is the one who makes arrangements in form of an offline/ online platform to buy tickets for travel by air, rail, ship, passport, visa, etc. It may also arrange accommodation, tours, entertainment and other tourism-related services. Precisely speaking, something on the line of Goibibo, MakeMyTrip. In this blog, we shall look into the compliance part that startups in Tourism and Travel industry must abide by.
Register your Business: Ensuring that you have registered your business with any of the RoCs will let you operate as a credible and legit business in India
Apply for recognition to Ministry of tourism,
Recognition is offered for 5 years
Meet the eligibility criteria
Attaching relevant documents with the application
An inspection carried out by department officials within60 working days of application submission.
The TA is entitled to incentives and concessions as may be granted by the Government from time to time.
Approved TA to prominently display the Certificate of approval of recognition given by MOT in the office by pasting it on a board or in a picture frame so that it is visible to a potential tourist.
Billing guideline: Example, the tickets that you provide must be dated and stamped.
Abide by Frontier regulations: Must see to it that the customer compiles with frontier regulations, such as personal documents, passport, visas, customs declarations etc.
Refund Policy: Recognize the traveler’s right to terminate the contract provided he pays the agency for all the expenses incurred and waive the deposits made in advance.
Vendor Agreement: Managing the third party could be a huge task for businesses in this sector, contract bounding the parties involved by rules and duties will enable your company work glitch-free.
Bookkeeping: Recording your day to day transactions, categorizing them in their heads and reconciliation of banks with your accounts. There are three methods you can use:
Do It Yourself (DIY) You can do it yourself by using Excel spreadsheet or Tally
Outsource the Accounts You have the option of using an outsourced or part-time accountant
Hire an in-house Accountant If your business is big enough, you can opt for an in-house accountant for your company who can do all your work under your roof.
Keep A Track Of Your Taxes: You need to keep a track of any penalties or any government compliances you need to do. There are taxes that you need to take care of at certain point in your business such as service tax, Sales Tax, and so on. If not taken care of, you may end up paying high penalties and bear punishment from the government.
Tax Filings: It is mandatory that any registered businesses should file annual returns with MCA every financial year. No problem if you got no returns made, you will have to just file ‘Nil Returns in such situation.
Funding Compliance: Raising investment is a major milestone for startups, and for investor apart from investing in a good idea, securing the invested money via Funding compliance is more than a priority. This compliance can be done only in the presence of a qualified Lawyer in the party.
ESOP: ESOPs refer to plans that give employees the right to purchase a certain number of the company’s shares instead of salary. This provides the employee with a virtual stake and helps to reduce the risk of the founder. This blog will help you understand the procedure to issue ESOP
Documents required for TA recognition:
Application form duly filled in.
Two attested photographs.
Documentary proof (preferably registration certificates from Government) in support of beginning of operations of your firm.
A signed copy of the Pledge of Commitment towards “Safe & Honourable Tourism”. The pledge is attached to English & Hindi as Annexure I & II, respectively.
A copy of complete Audited Balance Sheet with the Director’s Report for the latest financial year.
Income Tax Acknowledgement for the latest assessment year.
Service Tax Registration number from the concerned authority.
Certificate of Statutory Auditor of the firm stating Paid-up Capital not less than Rs. 3.00 Lakh. For Travel Agents from the North – Eastern region, remote and rural areas, the minimum Paid-up Capital (or Capital employed) should be at least Rs. 50,000/- duly supported by the Statutory Chartered Accountant’s certificate.
A copy of IATA approval letter indicating Numerical Code Number and a copy of IATA Accreditation Certificate for the Current year.
Reference letter from Bank on its original letterhead regarding firm’s bank account and address with telephone numbers.
The details of staff employed giving names, designation, educational qualification & experience in tourism field and length of service in the organization (copies of certificates to be enclosed): a) There should be a minimum of four qualified staff out of which at least one should have 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 as one of the qualified employees. b) 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 who have worked for three years with IATA / UFTA agencies and also those who have two years experience with Ministry of Tourism approved Travel Agencies. c) For the 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 as one of the qualified employees. d) Names of focal points. List of Directors / Partners or name of the Proprietor. Details of office premises, whether located in a commercial or residential area, office space in sq. ft. (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) and accessibility to toilet and reception area.
A Demand Draft for Rs. 3,000/- towards processing fees payable to Pay and Accounts Officer,
Ministry of Tourism, Government of India.
Documents duly stamped & attested by the Managing Director / Managing Partner/ Proprietor of the firm.