Now only 5% GST will have to be given in hotels.
With the implementation of the new GST rates, the rooms with Rs 7,500 or less in the hotel will become cheaper by Rs 525 from Monday. The hotel sector believes that the rates of Goods and Services Tax (GST) for the hotel industry have been reduced from 12 percent to 5 percent and the industry is expected to increase due to lack of input tax credit (ITC). Companies say that this will increase revenue, encourage investment and hotels will be able to provide better services to guests across the country.
At present, 12 percent GST is levied with ITC on hotel rooms up to Rs 7,500 per day. According to the Hotel Association of India, the rent of the room will be seven percent cheaper by this deduction. Similarly, passengers will also get the benefit of GST on eating.
People will get relief
Nikhil Sharma, Managing Director and Chief Operational Officer (COO) of South Asia of Radisson Hotel Group, said that the reduction of GST will provide relief to the hotel operators and this will also benefit the passengers. The owner of a brand like Ramada, Rahul McAchar’s managing director of Eurasia Market of Vindham Hotels and Resorts said that India’s travel and hospitality sector is increasing firmly and GST improvement has come at the right time.
New rate will be implemented from 22 September
Earlier this month, the GST Council approved major changes in the indirect tax system. Under this, the slab has been reduced to only 5 percent and 18 percent by improving rates. This change will be applicable from 22 September i.e. from the first day of Navratri.
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