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GST reduction on hotels to spurt the tourism growth

Addressing the media at before the inauguration of 2nd India Tourism Mart 2019, Prahlad Singh Patel, Union Minister for Culture & Tourism (IC) said that GST rate cut on hotel accommodation service will boost tourism sector. He said that the decision of the GST Council to lower the GST rate for hotels was the most significant and will create a favourable environment for the tourism industry.

Last Friday, Finance Minister Nirmala Sitharaman has announced that the rate on hotel rooms with tariff ranging from Rs 1,000 to Rs 7,500 has been cut to 12 percent, down from 18 percent. Similarly, the current tax at 28 per cent has been brought down to 18 per cent for rooms ranging Rs 7501 and above. Also there will be no GST for hotels ranging Rs 1000 or less, the Finance Minister said.

Welcoming the move, Nakul Anand, Chairman – Federation of Associations in Indian Tourism and Hospitality (FAITH) and Executive Director, ITC, said: “The news on GST rationalization comes as a big shot in the arm for the Tourism industry. All ten member bodies of FAITH have worked tirelessly towards this endeavor and on behalf of FAITH, we would like to thank the Government for making this happen. This adds great spurt and momentum to the Hospitality industry and creates a positive sentiment that ensures more vigour and strength to Destination India. "

Madhavan Menon, Chairman & Managing Director, Thomas Cook (India), said that the much anticipated reduction in GST for the hospitality industry is a shot in the arm for the sector in creating a competitive playing field versus destinations in the Asian region and hence cascading positive impact to Inbound, domestic, business travel and MICE segments.

According to Dipak Deva, Managing Director, TCI (Travel Corporation India), this is one of the best moves to make India competitive. “Combined with the visa fees reduction, we are in a very sweet spot. Now it is time that the industry delivers their promise of increasing numbers. The government has done all that they were asked," Deva said.

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