Indian Hotels Demand Restoration of Input Tax Credit
The FHRAI has requested the restoration of input tax credit on hotel room tariffs below Rs 7,500, as its removal adds financial burden. The recent GST reduction from 12% to 5% excludes input tax credit, impacting hotels' operating costs and hindering domestic tourism growth.
- Country:
- India
The Federation of Hotel & Restaurant Associations of India (FHRAI) has called for the government to restore input tax credit on room tariffs below Rs 7,500, citing increased financial burdens on hotels. Previously, these tariffs were subject to input tax credit under a 12% GST rate, but with the reduction to 5%, this provision has been removed.
FHRAI President Surendra Kumar Jaiswal, addressing a press conference, noted that 90% of Indian hotels fall within this tariff bracket. The reduction has unexpectedly transferred a cost burden onto hotels, especially in smaller cities, as it impacts their ability to manage expenses such as rentals, utilities, and manpower.
The organization stressed that the removal of input tax credits deters investment and could harm the growth of domestic tourism. FHRAI urged prompt action to reinstate the tax credit and eliminate compliance ambiguities, ensuring hotels continue to thrive.
(With inputs from agencies.)
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