Revised GST slab a welcome move: Hotel industry
Mumbai, Jun 21: The Hotel and Restaurant Association of Western India (HRAWI) on Wednesday welcomed the revised goods and services tax (GST) slab on hotel room tariffs.
According to revised slab room tariffs ranging between Rs 2,500 and Rs 7,500 would attract a tax of 18 per cent.
With the revision, the highest tax rate of 28 per cent is assigned to tariffs of Rs 7,500 and above, HRAWI said in a release issued.
Along with the revision in the slabs for room tariffs, the tax rate for air-conditioned restaurants, including restaurants in five-star hotels will have GST at 18 per cent, effective from July 1, 2017.
"This is unarguably a welcome revision. But, if India has to remain competitive as a tourist destination, this may just not cut the ice. While neighbouring countries pay 5-12 per cent GST or equivalent tax, hotels in India would be levying 18 and 28 per cent GST. This may not augur well with foreign inbound tourists who are lured with significant deals and sops by our neighbours," HRAWI President Dilip Datwani said.
Putting to rest the speculations that the implementation of GST could be deferred, Finance Minister Arun Jaitley on Sunday said the new tax regime would be launched on the midnight of June 30 and July 1 at a function in New Delhi.
Addressing the media, Jaitley said hotel rooms costing Rs 2500-Rs 7500 will be taxed at 18% while those above Rs 7500 will attract levy of 28%.
"GST on restaurants in these hotels will be at par with other air-conditioned restaurants (18%)," the Finance Minister said on Sunday.