The GST Council, headed by Union Finance Minister Nirmala Sitharaman on Friday announced a tax hike on caffeinated beverages but slashed the same on hotel tariffs and some goods with a view to addressing sectoral concerns in a slowing economy. Hotel industry whole-heartedly welcomed the reduction in GST on hotel room tariffs as it will provide a major boost to the hospitality and tourism sector.
Welcoming the move, Federation of Associations in Indian Tourism & Hospitality (FAITH) Chairman and ITC ED Nakul Anand said: “The news on GST rationalization comes as a big shot in the arm for the tourism industry.” This adds great spurt and impetus to the Hospitality industry and creates a positive sentiment that ensures more vigour and strength to Destination India, he added.
Briefing media after the 37th GST Council meeting in Goa, the finance minister said that the council has decided to hike the GST on caffeinated beverages to 28% as against the current rate of 18%. Besides, an additional cess of 12% has also been announced, making the tax on caffeinated beverages almost doubled.
On the contrary, to boost job-creating hospitality industry and tourism, the GST (goods and services tax) on hotel rooms with tariffs of up to Rs 1,000 per night will be cut to nil. The same for tariff of between Rs 1,001 and Rs 7,500 per night has been cut to 12% from the currently existing 18%.The tax on room tariff of above Rs 7,500 has been slashed to 18% from the existing 28%.She further said that the tax on outdoor catering has been reduced to 5% from the present 18% with input tax credit.
With this move, the rates for hotel rooms per night would go down while the prices of beverages, including Red Bull, Coca Cola, and Thumbs Up others are likely to get dearer.
