Sikkim's Tourism Sustainable Development (TSD) Fee: A Comprehensive Guide for Tourism Businesses and Visitors

CA ANANT LALL GUPTA, GANGTOK, SIKKIM.

Sikkim's Tourism Sustainable Development (TSD) Fee is a statutory, Rs. 50 per‑tourist entry fee introduced to support eco‑friendly tourism infrastructure and protect the state's fragile Himalayan ecology. As a finance professional based in Gangtok, this note sets out the legal basis, effective period, coverage, exemptions, collection mechanism, and purpose of the levy in practical terms for tourism businesses and visitors.

Legal Basis and Start Date

The TSD Fee has been introduced under the Sikkim Registration of Tourist Trade Act, 2024 and the Sikkim Registration of Tourist Trade Rules, 2025, which empower the Tourism & Civil Aviation Department to levy a tourism‑linked charge on visitors. Collection of the Tourism Sustainable Development (TSD) Fund through this fee commenced in March 2025, with operational notifications around 5–14 March 2025 and implementation aligned with hotel check‑ins from that period.

Period and Rate of Levy

The current notified rate is Rs. 50 per tourist, treated as an entry fee linked to the first check‑in in Sikkim. The fee covers a continuous stay in the state up to a maximum of 30 days, and is payable only where the tourist stays overnight in an accommodation unit; it is not a per‑room fee but a per‑guest charge.

Important Clarification on Re-entry

If tourists leave Sikkim and re-enter within the same month, they must pay the entry fee again. However, tourists who remain in the state continuously for up to a month pay only once regardless of how many times they change hotels or accommodation units during their stay.

Who is Covered and Who is Exempt

The fee applies to all tourists—domestic as well as international—entering Sikkim and availing overnight accommodation in registered units such as hotels, resorts, homestays, service apartments, and bed‑and‑breakfast establishments.

Exemptions

As per official communication, the following categories are exempt from the TSD Fee:

Children below five years of age
Persons visiting for government work

The charge is otherwise broadly applicable without differentiation by state of origin or nationality.

Collection Responsibility and Compliance

Registered tourist accommodation providers have the statutory responsibility to collect Rs. 50 per eligible tourist at the time of check‑in and to show this transparently in booking forms, receipts, or registration details.

Remittance Requirements

These entities must remit the accumulated TSD collections on a weekly basis into the designated government account through the "Atithi – Guest Information System, Sikkim". The collected fees must be transferred to the Tourism and Commercial Tax Division of the Finance Department with proper reporting.

Display Requirements

Tourism operators are required to display information regarding the TSD Fund at:

Reception areas
Websites
Booking portals

This ensures transparency and awareness among guests about the fee and its purpose.

Penalties for Non-Compliance

Under Rule 83 of the SRTT Rules, 2025, non-compliant entities face escalating penalties:

First month of default: Rs. 5,000 fine
Second month of default: Rs. 10,000 fine
Third consecutive month: De-registration from the tourism trade registry

The Tourism Department has issued recent directives (November–December 2025) noting that while some accommodation units have complied with the TSD Fund requirements, many establishments have not yet fulfilled this statutory obligation, prompting reinforced enforcement measures.

Key Operational Points for Hotels and Homestays (Practical View from Gangtok)

1. Billing and Accounting Systems

The TSD Fee should be mapped as a separate line item in your billing/Property Management System, to ensure clear audit trails and easy reconciliation with Atithi portal reports. This segregation is critical for:

Transparent guest billing
Accurate weekly remittance calculations
Compliance verification during inspections

2. Record Maintenance

Maintain guest‑wise records showing:

Name and contact details of tourists
Check-in and check-out dates
TSD Fee collection status (collected/exempt)
Receipt numbers and dates
Weekly remittance reference numbers

3. Weekly Remittance Discipline

Establish internal processes to ensure weekly remittance without fail:

Designate a responsible person for TSD compliance
Set up calendar reminders for weekly transfers
Reconcile Atithi portal entries with your PMS data
Maintain documentary evidence of all remittances

4. Compliance Documentation

Proper maintenance of guest‑wise records will be important from a tax and regulatory compliance standpoint, especially during:

Departmental inspections
Annual audits
Registration renewals under the SRTT Act and Rules
Tax assessments

5. Staff Training

Ensure front-desk and reservation staff are trained on:

When to collect the fee (at check-in)
Who is exempt (children under 5, government officials)
How to explain the fee to guests
Proper documentation procedures

Purpose and Use of the Fund

All collections are credited to the Tourism Sustainable Development (TSD) Fund, a dedicated pool earmarked for tourism‑related public investment.

Planned Utilization Areas

The government has indicated that these resources will be used to:

Infrastructure Development
- Strengthening tourism infrastructure including roads and connectivity
- Developing tourist facilities and amenities
- Improving public transport and accessibility
Environmental Management
- Improving cleanliness and waste management systems
- Protecting biodiversity and natural habitats
- Managing carrying capacity at sensitive tourist sites
Cultural Preservation
- Supporting initiatives that preserve Sikkim's cultural heritage
- Promoting responsible and sustainable tourism practices
- Managing rising tourist footfalls responsibly
Community Development
- Enhancing local community benefits from tourism
- Building capacity of local tourism entrepreneurs
- Promoting eco-friendly tourism initiatives

Conclusion

The TSD Fee represents Sikkim's commitment to balancing tourism growth with environmental and cultural sustainability. For tourism businesses, compliance is not merely a statutory obligation but a contribution to preserving the very assets that make Sikkim an attractive destination.

Immediate Action Items for Accommodation Providers:

✓ Update your billing systems to show TSD Fee as a separate line item
✓ Register/update your profile on the Atithi. Tutorial for portal link : https://atithigis.sikkim.gov.in/tutorial-details/2
✓ Display TSD Fee information at reception and on your website
✓ Train staff on collection and documentation procedures
✓ Set up weekly remittance processes
✓ Maintain detailed guest-wise records

For queries or clarification on TSD Fee compliance, tourism operators should contact the Tourism & Civil Aviation Department, Government of Sikkim, or consult with a local finance professional familiar with the SRTT framework.

This note is prepared for general guidance and does not constitute legal or professional advice. Tourism operators should verify current requirements with the Tourism Department and ensure compliance with all applicable provisions of the SRTT Act and Rules. CA SI

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KKIM CAGANGTOK CHARTEREDACCOUNTANT #CAANANTLALLGUPTA

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Sunday, November 30, 2025