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of <h1>Expenditure-tax Act, 1987 exempts foreign tourists from 10% tax in hotels for payments via travel agents in converted currency.</h1> The Expenditure-tax Act, 1987, imposes a 10% tax on chargeable expenditures in certain hotels where room charges are Rs. 400 or more per day. Chargeable expenditures include payments for accommodation, food, drinks, and services like beauty parlors or swimming pools, excluding payments made in foreign exchange. Payments made in Indian currency from converted foreign exchange by travel agents for foreign tourists are deemed as foreign exchange, exempting them from the tax. Consequently, hotels are not required to collect expenditure-tax from foreign tourists when payments are made by travel agents in converted currency, and they need not remit such tax to the government.
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