Chennai: The Indian hospitality industry has expressed strong disapproval and disappointment in the Goods & Services Tax (GST) tax proposal for the hotel and restaurant industry in the country by the GST Council while the budget hotel segment hailed the proposal.
The GST Council has proposed the highest tax slab of 28% for hotel rooms above Rs 5,000 room rental by creating a category of “luxury.” Informing that the industry is waiting for the “overall schedule of service category-wise tax structure, Aashish Gupta, Consulting CEO of Federation of Associations in Indian Tourism & Hospitality (FAITH), an umbrella association all the stakeholding association in the travel, tourism and hospitality sectors, expressed dismay in creating a category of “luxury” and clubbing the hotel industry with betting, racing and cinema industry.
Budget hotel industry has supported the tax rates finalised by the GST council between nil and 12%. Ritesh Agarwal, Founder & CEO, OYO, welcomed the rates, and said “it will ensure that the industry’s quality upgrade continues while delivering standardised accommodation to millions of middle-class travellers.”
The GST Council has proposed ‘nil’ tax for hotel rooms charging Rs 1,000 per night, hotels charging above Rs 1,000 and up to Rs 2,500 will be placed in 12% GST bracket, between Rs 2,500 and up to Rs 5,000 will invite a GST of 18% and all rooms above Rs 5,000 rental per night will carry a GST of 28%. Similarly, all air-conditioned restaurants will carry a GST of 18%, and non-airconditioned 12%.
Meanwhile, the Tamil Nadu Hotels Association has announced to down shutters on May 30 protesting against the proposed increase in GST structure. About 2 lakh standalone restaurants and those attached to hotels in the state will participate in the ‘bandh.’...