Hoteliers upset over GST on rooms below Rs 1K

Abhinav Vashisht

KULLU, JULY 2

Hoteliers are upset that the GST Council has decided to levy 12 per cent GST on the rooms with tariff up to Rs 1,000 from July 18.

There are a large number of hospitality units that offer budget rooms to lower and middle class tourists. This can have a direct impact on their business now as the rooms will be expensive.

They say that the GST rate is high and instead of 12 per cent, it should have been 5 per cent. Rooms with tariff between Rs 1,000 and Rs 7,500 are placed in the 12 per cent tax bracket and rooms above Rs 7,500 fall under the 18 per cent bracket. They add that rooms below Rs 1,000 should be placed in the 5 per cent bracket.

Hoteliers say that the government has given exemption in the past to provide relief to small hoteliers and low and middle class tourists, but now the influx of such tourists will be affected.

Gajender Thakur, chief patron, Manali Hoteliers Association (MHA), said there is no harm in paying GST, but it is extremely high for the budget category hotels. He added that it should have been up to 5 per cent. MHA vice-president Roshan Thakur said the business of small hotel operators will be affected.