Travel, tourism industry urges Govt toconsider uniform 12% GST rate for hotels

 

 

THE travel and tourismi ndustry on Wednesday urged the governmentto consider a uniform 12 per cent GST rate on hotels intheupcomingBudget for 2024-2025 toboostdomestic and inbound tourism. The tiered GST based on hotel room tariffs can lead to priced is parities as hotels adjust room rates based on demand and peak season rates. For example, a room night costing Rs10,000 falls under the 18 per cent GST rate,whileanoff-season rate of Rs 7,000 falls under the 12 per cent GST rate.

 

“We urge the Finance Minister toconsidera uniform GST rate of 12 percent on hotels in Union Budget FY25.This  will help simplify the compliance processes,” online travel services provider MakeMyTrip cofounderandGroupCEORajesh Magow said. He said the Government should remove disparities between e-commerce operators and e-commerce suppliers in the domestic market. “For example, currently, a customerpaysa5percentGST (goodsandservicestax)charge when booking a non-AC bus through an e-commerce platform.

 

This charge is zero for a directbookingfromabusoperator, irrespective of whether it is done in online or offline mode,” he added. Magow further stated that tax incentives for hotels and homestays for adopting sustainable practices align with India’s commitment to the United Nations Sustainable Development Goals, particularlySDG11(SustainableCities and Communities) and SDG 13 (Climate Action). “By offering tax incentives that promote eco-friendly measures in the tourism sector, such as energy-efficient lighting,water-savingdevices, andwaste-reductionpractices, the Finance Minister will be encouraging the industry to contribute to these global goals,” he added.

 

Hotel And Restaurant Association (Western India)president Pradeep Shetty saidthe association believes that tourism and hospitality, accounting for around 10 percent of India’s GDP, should bedeclared a priority sector. “Grantinginfrastructurestatus to hotels and conventioncentres of project cost of Rs 10crore andabove is essentialforattracting investments andacceleratinggrowthinthehospitality sector,” he added. He further said the current GST rates for hospitality areamong the highest globally, making tourism expensive. “We urge theabolitionofthe18 per cent GST category forhotels with room rates aboveRs 7,500 per night, merging itwith the 12 per cent GST category to boost both domesticand inbound tourism,”Shetty noted