GST cut on hotel tariffs to boost tourism in state: Jai Ram

The GST Council on Friday decided to lower GST rates on hotel tariff and outdoor catering, giving a boost to the hospitality sector.

Himachal Pradesh chief minister Jai Ram Thakur on Monday said the recent economic reforms, including lowering of Goods and Service Tax (GST) on rooms tariffs, announced by the Centre will benefit hoteliers across the state, especially Shimla, Kullu and Manali, and subsequently spur tourists’ inflow in the state.

Chief minister Jai Ram Thakur addressing the media during a press conference in Shimla on Monday.(Deepak Sansta /HT)

The GST Council on Friday decided to lower GST rates on hotel tariff and outdoor catering, giving a boost to the hospitality sector. The GST rate on hotel rooms with tariffs of up to ₹7,500 per night has been cut to 12 per cent from the existing 18 per cent. Similarly, the tax on room tariff of above ₹7,500 has been slashed to 18 per cent from the existing 28 per cent. There will be no GST on room tariffs of below ₹1,000 per night. Besides, the rate on outdoor catering has also been decreased from 18 to 5 per cent.

Addressing a press conference here, the chief minister said the decision will directly benefit Himachal Pradesh and boost tourism. “The decisions have been appreciated by the industrialists and hoteliers at state, national and international level,” the chief minister said.

There are as many as 3,084 registered hotels, 1,654 registered home stays and nearly 44,552 rooms having an average occupancy of 30 per cent in Himachal.

Thakur said the decision to abolish GST on cups and plates made from leaves and hides will also boost the leaf plate market and will create employment opportunities in rural areas of the state.

The chief minister said these reforms have further increased the investment opportunities in the state as the announcements have come less than 2 months before the global investors meet in Dharamshala.

He said the aim is to make India a $3 trillion economy by 2022 and $5 trillion by 2024.

“Tensions between Iran and Saudi Arabia and trade war between China and USA has lead to investment uncertainty in the Asian market. In order to attract foreign investments besides retaining the existing ones, privileges and financial benefits to investors in India must be better than other countries and hence these reforms were announced by government,” Thakur said.

Responding to a query regarding government expenses, he said the government will identify different sectors to adopt austerity measures.