Hotel industry cheers the rate cuts on hotel room tariffs

Hotel industry on Friday welcomed the reduction in GST on hotel room tariffs that, it said, will provide a major fillip to the hospitality and tourism sector.

Finance Minister Nirmala Sitharaman announced nil tax for hotels room tariffs of up to Rs 1,000 per night. Hotels charging Rs 1,001 to Rs 7,500 per night would be levied with 12 per cent tax as against the existing 18 per cent.

Similarly, the tax on room tariff of above Rs 7,500 has been slashed to 18 per cent from the existing 28 per cent. Also, tax on outdoor catering has been reduced to 5 per cent from existing 18 per cent with input tax credit, Sitharaman said.

Welcoming the move, Federation of Associations in Indian Tourism & Hospitality (FAITH) Chairman and ITC ED Nakul Anand said: "The news on GST rationalization comes as a big shot in the arm for the tourism industry."
In similar vein, Radisson Hotel Group, South Asia, MD and VP operations Zubin Saxena said: "Widening the net for hotels to be charged at 12 per cent GST is a step in the right direction and will help the hospitality business to slightly ease off amongst several pressures."
IHG, SWA Regional Vice President Vivek Bhalla said: "We welcome the GST Council's decision to reduce the GST rates across segments for the hospitality industry."