GST rate cut on hotel tariffs: Here’s how the industry experts reacted to Modi government’s move

Not just the rates, even the tax slabs were rearranged, which was earlier 28 per cent

Goods and Services Tax Council, Nirmala Sitharaman, GST rate cut on hotel tariffs, Sarbendra Sarkar, Pushpendra Bansal, Vineet Verma, Jean-Michel Cassé, Vivek Bhalla, Farroukh Kolah

The GST (Goods and Services Tax) Council, led by finance minister, Nirmala Sitharaman recently revised the tax rate of the hotels with room tariff of INR 7,500 and above at 18 per cent instead of the earlier 28 per cent. While the government’s move on revised tax rate has brought about a much-needed relief to the hospitality and tourism sector; Industry leaders share their perspective on its impact: 

Vineet Verma, ceo and executive director, Brigade Hospitality Services Limited

The much awaited reduction in GST rates applicable to hotels is bound to provide the much-needed impetus to the hospitality & tourism sectors. Companies that work on contracted or RFP rates and Individual travellers including tourists, who pay from their own pockets, are bound to also welcome this move. The proposal to reduce GST on outdoor catering by hotels, from the present 18% to 5% is also commendable, though I do wish the benefit of ITC had been retained.

Jean-Michel Cassé, chief operating officer (coo) – India & South Asia, Accor

We welcome the decision to lower and further rationalise the GST structure on hotel room tariffs in what promises to be a major fillip for India’s hospitality and tourism industry. This is a significant development and we commend the honourable finance minister’s decision to support the industry and in the government’s commitment to bolster economy and encourage business activity. Travelling, whether for business or leisure is essential in a growing economy and we are glad to see a more favourable taxation environment.

Vivek Bhalla, regional vice president, IHG, SWA

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. With the festive and holiday season around the corner, the timing could not have been better.

Sarbendra Sarkar, managing director & founder, Cygnett Hotels & Resorts

This is a welcome step; any move that helps travelers gain more out of their dispensable budget, luring them to travel more. Moreover, this would also help the industry receive the traction that was not evident since the past few months. This will certainly boost the average occupancy of hotels, helping them rationalize the annual numbers. Additionally, it will also help us propel our value proposition at a competitive price point that we are operating in.

Pushpendra Bansal, coo, Lords Hotels and Resorts

GST rate rationalization for hotels is an extremely positive development. We are grateful to the finance minister for having considered this demand of the industry. This move is expected to serve dual purpose of boosting tourism and generating more employment. The end users will get the benefit of this announcement.

Farroukh Kolah, vice president & chief financial officer, SOTC Travel

Travel and Tourism industry is a vital contributor to the country’s growth. The announcement on lowering the corporate tax from 30% to 22%, which is now at par with the South Asian countries, will have a significant and positive impact on the economy. The reforms undertaken by the government will help businesses with higher post-tax profits hence incentivising investments into the country and will boost the current economic growth rate.

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