The last few days have brought a huge relief to the hotel industry in Goa, as the GST Council has reduced tax rates on hotels. TheTravel and Tourism Association of Goa (TTAG) had been lobbying really hard for two years to bring down the GST rates.
Therefore, TTAG deserves a lot of credit. But, now, the ball is in the hoteliers’ court. The fact that the tax rate is down by 10% on premium hotels means these are expected to pass on the benefits of lower taxes to the tourists.
Before the recent announcement, the tax was 28% on a hotel charging more than Rs 7,500 per day tariff. This has now been reduced to 18%. 10% is a massive tax reduction, but it will mean a lot to tourists if they spend 10% less on their hotel bills.
Even for other categories, tax rates have been brought down significantly. For hotels charging Rs 1,001 to Rs 7,500 per day tariff, tax is reduced to 12% from 18%. Meanwhile, there is no GST on hotels charging Rs 1,000 or less tariff per day.
The benefit of tax reduction must be passed on to the consumers, which in this case are tourists. This is also a great opportunity for hotels in Goa to bring in more transparency in their tariff practices. Hotels in the State are notorious for imposing ridiculous tariffs on occasions like New Year when tariffs can be as high as Rs 80,000 a day.
The government has done its job by making tax rates more reasonable, but it remains to be seen if hotels will do their bit by becoming more reasonable when it comes to charging tariffs to the tourists.
There will be no better time than this for becoming more fair and transparent with regards to tourists. The new season is set to begin from November after the previous season was a disaster for the industry. Much lesser foreign tourists arrived in the State last season, as they preferred going to Egypt and Turkey.
Throughout 2019, lesser Indian tourists arrived on Goa’s shores on long weekends. The tourism trade is going through a recession. And, therefore, the hoteliers will do good by looking within themselves and asking whether they have been reasonable and fair to the tourists.
The State Government must do its job by getting the beaches cleaned and by improving the infrastructure. There are still teething issues like high visa charges, which only the Central Government can look into.
But the ball is clearly in the court of hoteliers and they must begin by passing on the entire benefit of GST reduction to
the tourists.
