Impact of GST on cost of hotel stay would depend on the current tax regime the hotel’s location subjects it to; presently rates vary from 19% to over 25% depending on the State and irrespective of the rack rate/tariff. For the premium category (above Rs. 5,000), the direct impact of GST is expected to be moderate while stay in economy and midscale hotels (Rs. 1,000-5,000) is expected to become cheaper. Impact on dining out is expected to be largely neutral to marginally positive, as restaurants pass on benefits of ~1%.
Additionally, benefits under GST would trickle in from availing seamless input-tax credit (on services and local taxes) which will lower the overall cost for hotels and restaurants.
» Hotels and lodges with tariff less than Rs. 1,000 per day, in line with existing tax rates
» Second-class rail travel
|5%||» AC railway travel and economy class Air Transport||» Restaurants with Rs. 50 lakh or below turnover.|
» Non-AC restaurants and Business class air travel
» Hotels with tariffs Rs. 1,000-2,500
» Air conditioned restaurants with liquor license
» Hotels with tariffs Rs. 2,500-5,000
|28%||» Hotels, resorts and lodges with tariffs above Rs. 5,000||» Entertainment items like gambling, golf courses and Cinemas will also attract this highest slab|