GST impacts Kerala tourism industry

Published on : Wednesday, January 3, 2018

keralaThe state government of Kerala said that after the implementation of the goods and service tax the growth rate of tourist arrivals went down last year in Kerala.



However, the government was  hopeful that things would improve in the coming days  considering the recent changes in the tax rates applicable to the hospitality sector.

An increase in the inflow of tourists as per the statistics available up to September last year was observed but the growth rate showed a decline from August onwards after the implementation of the Goods and Services Tax (GST).


Tourism Minister Kadakampaly Surendran said that GST has definitely affected the tourism industry in Kerala but hoped  with the changed GST rates for the hospitality sector, things would improve in the coming days.


The new tax regime came into force on July 1, 2017 and after the first major revision  the GST Council in November lowered the tax rate to a uniform 5 per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones.


18 per cent tax rate for restaurants in starred-hotels that charges Rs 7,500 or more per day room tariff had also been imposed.


Surendran said the total arrival of domestic tourists in the state upto September, 2017 was around 1.02 crores reflecting an increase of 11.23 per cent compared to the same period last year.



For August and September the growth rate was 9.12 per cent and 5.29 per cent respectively.



It was considered to be lower as compared to the overall average of 15 per cent to 19 per cent for the first seven months of 2017.


Till September the  number of foreign tourists arrivals in the state was 7,69,772 with a growth of 4.23 per cent.



But in August and September, the growth rate was minus 9.05 per cent and minus 12.62 per cent respectively.


The minister further added that the Guruvayur in Thrissur district known for Sri Krishna temple is one of the preferred destinations for domestic tourists.

The main focus of the foreign visitors was on the state capital Thiruvananthapuram and Ernakulam district, where the “Queen of Arabian Sea” Kochi and several other attractions are located.



The new tourism policy will set up  new tourism regulatory authority to oversee tourism activities and check unhealthy trends in the sector. They plan to make the destination plastic-free within a span of three years.

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