Indian hospitality associations and hoteliers have given a thumbs up to the cut in goods and services tax (GST) rate on hotel tariffs.
The Goods & Services Tax (GST) council has announced its decision to reduce GST rate from 28 per cent to 18 per cent on room tariffs of ₹7500 and above while GST rate was slashed from 18% to 12% for hotels having tariff less than ₹ 7500 last week.
Indian tourism and hospiality associations have been consistently voicing concerns with regards to the high GST rates and its effects on the tourism and hospitality.
Federation of Hotel and Restaurant Associations of India (FHRAI), the apex body of hotel industry has welcomed the decision stating that ahead of the festive and holiday season, it anticipates the move to give boost to tourism and hospitality.
Hotel and Restaurant Association of Northern India (HRANI) thanked the central and state governments for the reduction in GST rates on hotel room tariffs in a bid to give a boost to the hospitality sector.
“HRANI is thankful to the Ministry of Finance, Ministry of Tourism and all members of GST council including all Chief Ministers and Finance Ministers of states of India for their support extended to the hospitality industry,” said Surendra Kumar Jaiswal, President, HRANI.
A section of hoteliers believe that the rate cut will make India more attractive for tourists.
“This move will lure travellers to travel more. It will certainly boost the average occupancy of hotels. Additionally, it will also help us propel our value proposition at a competitive price point that we are operating in,” said Sarbendra Sarkar, Managing Director & Founder, Cygnett Hotels & Resorts.
Some hoteliers shared that the decision taken by the GST Council should also help in improving the market sentiments.
Vivek Bhalla, Regional Vice President, IHG, SWA said, “We welcome the GST Council’s decision to reduce the GST rates across segments for the hospitality industry. It is a positive move which should help improve the market’s sentiment overall.”
However, the industry is still hoping for further relief with an uniform 12% GST regime on hotels across segments.