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India's Hotels Seek GST Cut to Boost Tourism
27 Apr
Summary
- EY and FICCI urge GST reduction on hotel rooms above ₹7,500.
- High taxes are making India a costly destination for tourists.
- Sector needs strategic reset beyond tax reforms for growth.
EY India and FICCI have jointly recommended a reduction in the Goods and Services Tax (GST) on hotel rooms costing over ₹7,500. The proposal seeks to lower the tax rate from 18% to 9%, aiming to enhance India's appeal as an international tourism destination. This move is intended to counter the perception of India being an expensive place to visit.
The current tax structure imposes 18% GST on premium hotel stays, while rooms between ₹1,000 and ₹7,500 are taxed at 5%. This significant disparity is seen as a major deterrent for high-spending foreign tourists. The report emphasizes that high accommodation costs, largely due to taxation, make India less competitive compared to countries like Thailand and Vietnam.
