Karan Sehgal
PANAJI
In a huge relief to the tourism sector in the State, Goods-and-Services-Tax (GST) Council has reduced tax rate on hotels. As per the announcement, GST rate has been reduced from 28% to 18% for hotels charging per day tariff of more than Rs 7,500.
The hotels charging per day tariff between Rs 1,001 and Rs 7,500 will now be taxed at 12% GST rate compared to 18% earlier. Meanwhile, there will be no GST on hotels charging Rs 1,000 per day tariff or less. These decisions were taken in a GST Council meet, which was chaired by Union Finance Minister, Nirmala Sitharaman.
Over the last two years, Travel and Tourism Association of Goa (TTAG) had raised the point that 28% tax rate for premium hotels was very high and due to it, hotels in the State were at a huge disadvantage vis-a-vis hotels in other destinations like Malaysia, Sri Lanka, Vietnam, Turkey
and etc.
Savio Messias, president, TTAG, said, “We are extremely happy with the reduction in GST on hotels and thank our Chief Minister, Pramod Sawant, and Mauvin Godinho for their tremendous efforts to convince the council. I am extremely proud that TTAG lobbied to do what the industry in the entire country could not do for the last one year.”
Sawant and Godinho had been making efforts for a long while now to convince the GST Council to reduce tax rate on hotels. In fact, Godinho has represented the State at the council ever since GST was rolled out in
2017 and he has been making efforts in this direction for a long time.
Tourism stakeholders were extremely pleased with the council decision to reduce tax rates on hotels
because the next season is set to begin from November. Lower tax rate will help hoteliers in keeping
tariffs low, which will make tourists happy.
Last year, the State endured its worst tourism season in decades, as the number of foreign tourists came down significantly. At that time, the tourism industry had lamented high GST rate on hotels in India saying that very few competing destinations have more than 8-10% tax rate on hotels. Now, the industry is happy since the tax rates have been considerably brought down.
