Hospitality industry welcomes governments decision to cut GST on room tariffs

NEW DELHI: The hospitality industry on Friday welcomed the governments decision to slash GST on room tariffs of Rs 7,500 and above from 28% to 18%.
The sharp cut, though expected for sometime, allowed the stressed industry to heave a sigh of relief amid a negative growth in tourist footfalls for the second quarter in a row.
With the latest rate cut, GST on room tariffs will now be limited to three slabs. Rooms under Rs 999 will remain tax free, those between Rs 1,000 and 7,499 will be taxed at 12%, and rooms above Rs 7,500 will be taxed at 18%.
Speaking to TOI, former president of the Federation of Hotel and Restaurant Associations of India (FHRAI), Garish Oberoi said, “This is a welcome step and it is going to act as a stimulus to the hotel industry ahead of the festive season.”
A demand for lower tax slabs has been a long standing demand of the tourism industry, which has argued that Indias taxation rates are significantly higher than its neighbouring nations, because of which many tourists were preferring to bypass India.
“Widening the net for hotels to be charged at 12% GST is a step in the right direction and will help the hospitality business to slightly ease off amongst several pressures. Reducing the rate for hotels above INR 7,500 also bodes well for the industry,” Zubin Saxena, managing director and vice president operations, South Asia of Radisson Hotel Group, said.
Coupled with the finance ministers announcement to slash corporate tax on domestic firms,Original Article