In the meeting held by the Goods and Services Tax (GST) Council in Goa recently, changes in taxes were proposed in order to boost the hospitality sector in the country. The tax has been reduced from the current 18% to 12% for hotel prices ranging between Rs 1,001 to Rs. 7,500 per night. Similarly, the current tax at 28% has been brought down to 18% for rooms ranging Rs 7501 and above. Also there will be no GST for hotels ranging Rs 1000 or less.
"This new initiative taken by our Ministry of Finance, under guidance of our Hon'ble PM is much appreciated. This was much awaited demand of the hotel industry which is going to give a boost to the tourism in India,” said Prahlad Singh Patel, Minister of Tourism and Culture, in a press release.
The move comes after PM Modi’s speech on the occasion of Independence Day. “There is a huge scope to improve our tourism and India has so much to offer. I know people travel to different countries for holidays, but can we think of visiting at least 15 tourist destinations in India before 2022, when we mark 25 years of freedom,” he had said.
The move comes in effect from October 1, 2019. "The GST rate cut comes as a welcome relief for hospitality industry that was heavily taxed. Our taxes are highest when compared with competing foreign destinations such as Malaysia and Thailand. As a hotel it will help us pass on the benefit to consumers,” said Ankur Bhatia, Executive Director, Bird Group.