GST to impact travel, hospitality in the coming months

Published on : Monday, July 3, 2017

gst 2The post GST effect will garner teething issues in the travel and hospitality sector, but the industry players need not worry and can expect support from government.



The GST compliance and filings will henceforth get more complex as there will be substantial increase in efforts and time at multiple levels, mentioned a travel service firm.



Hospitality players requested the government to levy a 28% tax on hotel rooms with tariffs of Rs 10,000 per night and above within the purview of the GST regime.


Dilip Datwani, President of Hotel and Restaurant Association of Western India (HRWAI) said that issues will crop up during the implementation phase during the first three months but they were not worried as the government will help in resolving.



Ritesh Agarwal, Founder and CEO of OYO Rooms expressed similar thoughts and mentioned that over the time there will be more familiarity and the challenges regarding the compliance and implementation will be sorted helping the stakeholders to adjust, adapt and adhere. However, initial issues will be faced by the players in the travel industry.



gst 1Significant challenges will be noted in the execution and compliance due to sheer complexity said, Thomas Cook, India CFO and President.


Agarwal commented on the issue of lower tax rate for budget hotels that such move will push the industries in upgrading their quality while they deliver standardised accommodation to middle class travellers. It will also save create new jobs that would have been impacted under higher tax rates.


However, Garish Oberoi, Vice President of Federation of Hotel and Restaurant Associations of India (FHRAI) said that 28 % GST for hotel rooms with tariff of RS 7,500 per night and above is very steep. He further requested to keep 28% tax on rooms with tariffs of Rs, 10, 000 and above.


Other players felt that the GST will have only marginal increase in cost for the travel sector.


Nandy said, “There is a marginal increase in the tour packages for domestic and international although there will be no impact on the holiday demand”.


The full impact of GST is yet to be ascertained, till date there has been some reduction in taxes the benefits of which will be passed on to the customer.


In a month’s time we will alter the prices after observing what happens to the input cost mentioned Riyaz Amlani, president National Association of India (NRAI).


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