PANAJI
Goa’s hospitality sector has hailed the Goods and Services Tax Council’s decision to cut GST on mid-range hotel rooms, saying it could give a much-needed boost ahead of the official tourist season beginning next month.
Under the revised regime that will come into effect from September 22, hotel rooms priced up to Rs 7,500 per night now attract 5 per cent GST, down from the earlier 12 per cent, whereas rooms above that threshold will continue to draw 18 per cent -- ensuring luxury stays firmly in the premium bracket.
For Goa, where budget and mid-market travellers form the bulk of arrivals, the change has been greeted as good news by industry players, including those in the popular beach shack trade.
“Prima facie, it is good news. The rate has been reduced from 12 per cent to 5 per cent. However, this has been offset as the benefit of input tax credit has been removed,” President of the Travel and Tourism Association of Goa (TTAG) Jack Sukhija told The Goan.
He added that the dual structure of tariffs is likely to create ambiguity, and they will wait for more clarity. “If you are charging above Rs 7,500, you are supposed to collect 18 per cent with full ITC. How will one determine whether input tax has been paid for a tariff of below Rs 7,500 or above? We await further clarification,” he said.
Restaurants within hotels have also been brought into the 5 per cent bracket without input tax credit, a change that could benefit larger hotels that were earlier charging 18 per cent.
Goa Chamber of Commerce and Industry's Director General Sanjay Amonkar has also welcomed the GST reforms introduced across the board. “The chamber has been continuously writing to the central government for the rationalisation of taxes by putting these two slabs of five per cent and twelve per cent. This is a big step towards ease of doing business," he said.
Shack owners too see a silver lining as Cruz Cardozo, President of the Shack Owners Welfare Society, said it will boost the influx.
“We welcome the decision. Some shack owners’ families also run hotels, and if room rates reduce due to the GST cut, it will help overall tourism in the State,” he told The Goan. The decision comes as Goa prepares for the upcoming season, which starts next month.
