21st September 2019

To All Members,

Sub: Reduction of GST on Hotel Accommodation

Dear Colleagues,

As you know that since the GST was introduced on 1st July 2017, IATO has been aggressively writing to the government to reduce and rationalize  GST on tourism and hospitality industry as this is hampering the growth of Indian Tourism Industry and we are not able to compete with our neighbouring countries due to higher taxation.

IATO not only approached, the Ministers and Senior officials in the Ministry of Finance, Ministry of Commerce, Ministry of Tourism, we also approached Finance Ministers of all the States who are members of GST Council. Besides we also wrote to all the Chambers of Commerce i.e. FICCI, CII, PHDCII and also through FAITH and WTTCII to raise our concern on every platform in one voice.

At last our efforts have borne fruit as you all must have come  know that GST Council in the 37th meeting held on 20th September, 2019 at Goa has taken the following decision in favour of tourism and hospitality industry:-

 

1.  To reduce the rate of GST on hotel accommodation i.e.  –

 

Transaction Value per unit (Rs.) per day       -       GST

·        Rs. 1000 and  less                                    -       Nil

·        Rs 1001 to Rs 7500                                  -       12%

·        Rs 7501 and more                                    -       18%

 

2.  To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC.  The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.

A copy of the Press Release dated 20th September 2019 is enclosed for your reference.

I would like to thank Shri Prahlad Singh Patel - Hon’ble Minister of Tourism, Government of India for personally taking our concern with the GST Council and assurance given to us during the IATO Annual Convention in Kolkata. We would also to thank Shri Yogendra Tripathi, Secretary Tourism: Mrs. Meenakshi Sharma, Director General Tourism: Mr. Suman Billa, Joint Secretary Tourism and Mrs. Rupinder Brar, Additional Director General Tourism, and the entire team in the Ministry of Tourism Government of India for supporting IATO/Industry and taking up our case strongly with the GST Council and Ministry of Finance.  

We are sure the move will give a boost to the Indian Tourism Industry and will bring job opportunities in the sector. The end users will get the benefit of this announcement as with this substantial relief in GST rate on hotel rooms, our package cost will reduce.

Thanking you and with best regards,

Sincerely,

Pronab Sarkar

President

Note: It is proposed by the GST Council to issue notifications giving effect to the recommendations of the Council on 1 October, 2019.

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