GST Slash: Boost for India's Hospitality Industry

Starting Monday, hotel rooms priced at Rs 7,500 or less will become cheaper as new GST rates come into effect. The Goods and Services Tax (GST) rate reduction from 12% to 5% without input tax credit (ITC) is being hailed as a catalyst for growth in the hospitality sector, according to industry players. They believe it will bolster revenue streams, encourage reinvestment, and enhance guest experiences nationwide.

The Hotel Association of India noted that for accommodations priced at Rs 7,500 and below, travelers will enjoy a 7% reduction on the room rate, with savings of up to Rs 525 per room per night. However, the industry group cautioned that GST reforms should maintain a business-focused perspective with the retention of ITC credit.

This tax overhaul was part of a broader set of changes approved earlier in the month, limiting GST slabs to 5% and 18% and taking effect from September 22. Industry leaders such as Nikhil Sharma of Radisson Hotel Group and Rahool Macarius of Wyndham Hotels & Resorts have endorsed the move, highlighting the positive impact on mid-market growth driven by India's expanding middle class and advantageous conditions in Tier 2 and Tier 3 cities.

(With inputs from agencies.)