Royal Orchid Hotels | GST for the Hospitality Industry: Benefits and the Way Forward
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GST for the Hospitality Industry: Benefits and the Way Forward

The tourism and hospitality industry of India is touted to account for 7.5% of India’s GDP, as suggested by a recent KPMG report. This is why this sector is reckoned as one of the key drivers leading India on the road to becoming one of the fastest growing economies of the world. It is also a significant contributor to India’s rising income from FDI. In this blog, we have mentioned some of the impacts of GST on the fast growing hospitality industry.

An indirect tax applicable to the entire nation, Goods & Service Tax has led to the abolishment of a plethora of indirect taxes such as service tax, state cess, surcharge, central excise duty and so forth. This is basically a destination-based tax that is levied on every value addition to avoid menaces, including tax evasion, round-tripping of money and money laundering.
One impact that this tax has had is the lowering of the final cost that a consumer pays. For instance, before the advent of the GST regime, customers had to pay for complementary food items (like breakfast) separately under the label of Value Added Tax. VAT also included other charges such as luxury and service tax under its name. But the application of GST has led to the waiving off of this tax category and the inclusion of this service under GST as a ‘bundled service’.
One such place where customers can reap the benefits of the GST regime is at Regenta & Royal Orchid Group of Hotels. Charging 18% GST currently, this hotel allows guests to save up to 30% on hotel bookings, when compared to the other hotels.
Another positive impact of the GST regime is that it has made dining at restaurants more economical. This is attributed to the fact that GST has slashed rates from 12% (in non-air-conditioned restaurants) & 18% (in air-conditioned restaurants) to just 5%. So, the next time when you are planning to treat yourself in a restaurant or booking a hotel for your upcoming trip, you don’t have to worry about burning a hole in your pocket.

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