Just when Goa tourism was asking for lower tax rates, 28% goods-and-services-tax (GST) was announced for rooms and restaurants in 5-star hotels, which might just bring the curtains down on any hopes that such hotels can ever attract lower taxation. This has shocked the entire tourism trade, not just the five-star hotels. And, it is obvious as to why the trade is vehemently objecting to a high rate of GST. It’s not that five-star hotels alone will suffer due to the high tax because it will, in all probability, have a trickle down impact affecting almost everyone in the trade. Premium properties like 5-star hotels help in building the brand of a tourist destination. Just consider how the entire belt of Candolim to Sinquerim grew after Novotel started its two hotels a few years back. If not for Novotel there, many smaller 3-star and 2-star properties would never have come to exist. Similarly, many restaurants would never have opened and several taxi-owners would never have gained their livelihood. Five-star hotels are the fulcrum of tourism activity in the state and therefore any impact on such hotels will negatively affect Goa’s tourism. Till now, the tourism industry would approach the state government for making an appeal to reduce the taxation. But with GST, that may not be possible because tax rates have been decided by the central government. The future clearly remains uncertain for 5-star hotels now and by that logic for everyone in the tourism business.
