GST impact on Hospitality Industry
GST Council provided relief to mid market and luxury hotels by stating that only rooms with tariff Rs. 7500 and more and not Rs. 5000 as declared earlier, have GST of 28%. Hotel rooms with tariff between Rs. 2500 to Rs. 7500 have GST of 18%. Now a days, have some sort of dynamic pricing, which fluctuates depending on demand and supply. Since the GST also varies depending on the tariff, hotels need to ensure that their billing system. The luxury hotel segment that the GST on their restaurants has been revised. GST is mixed bag of better and easier rules and regulations, increased costs and compliances. The hotel and restaurants Association of Western India has been lobbying for GST rate of 5% as it believed that lower rate will bring in more tourists and allow Indian businesses to compete with global chains. However, the GST Council deemed it fit to set the rate at 18%.