Indian hoteliers laud GST revision, but grievances linger

India’s Goods & Service Tax (GST) Council has decided to levy tax on transaction value of hotel rooms instead of published rates, bringing some relief to hoteliers who had been protesting the confounding taxation since its implementation.

Earlier, the tax council had pegged different slabs of GST rates on hotel room tariff – 18 per cent for tariff of Rs2,500 (US$36.40) to Rs7,500, and 28 per cent for tariffs of above Rs7,500.

“This is a very welcome change. GST being charged on published tariff was a let-down when the new tax structure came into effect. We have since then been lobbying against this anomaly. Even prior to the GST regime, tax was being levied based on the invoice value,” said Garish Oberoi, president, Federation of Hotel & Restaurant Associations of India (FHRAI), the apex body of hoteliers in the country.

Likewise, Vibhas Prasad, director of Leisure Hotels Group, said the change has come as a “big relief” to the hotel industry, as well as to the customers.

A section of hoteliers told TTG Asia the new notification of the GST Council will also help to reduce confusion among consumers who perceive that they were being charged a higher tax slab even when the invoice value is less.

Rajat Singhal, director, Leisure World Tours, added: “The hotel room tariffs vary as per seasonality or special rates for groups. But as GST was being charged on declared rates and not on the transaction value, it was making tour packages expensive even in low season or when we were getting special rates from hotel.

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