Decision to lower GST on hotels brings relief to tourism sector

After announcing major tax sops for Indian industry, the decision of the Goods and Services tax (GST) Council to reduce GST burden on various sectors of the economy has brought much-awaited relief to the Indian industry. The GST council has decided to reduce GST burden on hotels, gems and jewellery, defence and automobile sectors.

Major beneficiary of the GST reliefs announced by the council is the tourism and hospitality sector in the country which got the long pending demand of capping the highest tax slab reduced from 28% to 18%.

As per the amended GST rates applicable to hotels effective from 1 October 2019, hotels with room tariffs below INR 1000 (USD 14.10) will not invite any GST. Hotel rooms which have roof tariff between INR 1,000 (USD 14.10) and INR 7,500 (USD 105.77) per night will be liable for a GST of 12% instead of 18% earlier. The tax on room tariff of above INR7,500 (USD 105.77) has been slashed to 18% from the existing 28%.

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