Mid, top-end hotels to get cheaper from October 1

PANAJI: Your hotel stays will be less taxing with the GST Council deciding to slash the levy on rooms that cost over Rs 7,500 a night to 18% from the current 28%. Even in case of cheaper rooms the slabs have been reworked to provide relief.
Hotel rooms that cost up to Rs 1,000 will continue to attract zero levy; there is also no change in the 12% GST on those priced between Rs 1,001 and Rs 2,500.But GST on those that cost between Rs 2,501 and Rs 7,500 will be reduced from 18% to 12%, providing relief to many travellers who stay in mid-segment hotels.

But the bad news is caffeinated beverages, which include energy drinks, will now cost more as not only will the GST rise from 18% to 28% but they will also face a compensation cess of 12%, much like those on soft drinks which are seen as sin goods. “The move is meant to discourage the consumption of these drinks,” said Abhishek Jain, partner at EY India.

The new rates will kick in from October 1.
The council stuck to the views of the officials who had recommended that the indirect tax on automobiles, biscuits and several fast-moving consumer goods should not be lowered despite the high-decibel lobbying by industry players, especially car-makers.
But the GST Council went beyond the recommendations when it came to hotels, which finance minister Nirmala Sitharaman said is meant to boost the tourism sector. “The average GST rate on hotels in most of the countries is not more than 20%. So, the reduction in GST rate from 28% to 18% is in line with the international rates,” said Harpreeet Singh, a partner at KPMG.