State tourism ministers seek cut in GST on hotel rooms to boost sector

Resolution passed at conclave of ministers also calls for lower airfares, rationalisation of inter-state tourist vehicle taxes

Tourism Minsters from different states today urged to reduced GST for hotel rooms. They also asked for simplification and rationalisation of various taxes and levies to attract tourists and take on global competition.  

"The Tourism Ministers’ conclave 2019 at Kovalam, Kerala notes with concern that the GST Council of India has imposed 28 per cent GST on hotel room tariff over Rs 7,500 and 18 per cent tax on rooms with tariffs between Rs 2,500 and Rs 7,500. This tax rate is high compared with other countries," said a resolution unanimously adopted by the conclave.

The resolution, moved by Karnataka Tourism Minister  C T Ravi, said reduction in GST in hotel rooms is essential to attract more tourists.

The resolution also sought measures to reduce high airfares, as they are compelling leisure tourists to explore alternative global destinations.

"We express concern over the high airfares during peak season and festivals, which are forcing holiday-makers to opt for economical destinations. Besides, unexpected closure of certain airlines/carriers has led to increased airfares while minimal air connectivity with 2-tier and 3-tier cities has only compounded the problem," it stated.

The conclave also took note of the high and varied inter-state tourist vehicle taxes and called for its rationalisation across all the states to ensure seamless travel.

In another resolution, the conclave proposed formation of Regional Tourism Councils and developing tourism circuits, which can be region-based and in neighbouring states. “We resolve to jointly promote our tourist attractions across the world in order to give a cutting edge to our campaigns,” it said.

The resolution, moved by Odisha Tourism Minister Jyoti Prakash Panigrahi, said setting up Regional Tourism Councils will facilitate periodic interaction among different states and enhance collaboration.

Union Minister of State (I/C) for Tourism and Culture Prahlad Singh Patel, according to a press release from the State government, said while the Centre would extend its support to development of tourism in all states, it is necessary to think about ‘one nation one tax’ regime.

“We should revisit our perception about GST. Tourists come not only to stay in hotels. We have to also think about one nation one tax. There is also the issue of transport tax. All states should evolve a consensus to streamline it,” he was quoted as saying.

Describing e-Visa as a revolutionary step, he said the Centre has taken some steps to streamline it and make it more tourist-friendly.