Quick Summary
The hospitality industry has renewed its demand for a uniform 5% GSTon hotel accommodation and meals, urging the GST Council to rationalise the existing slab structure that, industry representatives say, is outdated and creates operational confusion. The demand has been raised by the Hotel and Restaurant Association of Haryana (HRAH), which has sought the removal of the current Rs 7,500 room tariff threshold that determines GST rates for hotels. At present, hotel rooms priced up to Rs 7,500 att
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FAQ :
The industry is demanding a uniform 5% GST rate on all hotel accommodation and meals, and the removal of the current Rs 7,500 room tariff threshold.
Currently, hotel rooms priced up to Rs 7,500 attract 5% GST without input tax credit, while rooms above this limit are taxed at 18% with input tax credit.
The threshold was set nearly ten years ago and no longer reflects current costs due to inflation and rising operational expenses, pushing many mid-segment hotels into the higher 18% GST bracket.
It causes confusion as meals in standalone restaurants are taxed at 5%, but the same food served via room service in higher-tariff hotels attracts 18% GST.
A single 5% rate would make travel more affordable, increase hotel occupancy, enhance India's competitiveness as a tourist destination, simplify billing, and improve the ease of doing business.
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