GST Council Recommends 5% Tax on Hotel Rooms Priced up to ₹7,500

The 56th GST Council meeting has recommended a reduction in Goods and Services Tax (GST) on hotel rooms with tariffs up to ₹7,500 per night. These rooms will now attract 5% GST without input tax credit (ITC), a move aimed at boosting tourism and making travel more affordable for middle-class and business travelers. The decision is expected to bring relief to hotels and guests alike, especially in smaller cities where budget-friendly stays are in demand.

The hospitality sector has long requested rationalization of tax rates, arguing that higher GST slabs discourage both domestic and international travelers. With this change, hotels in Tier-2 and Tier-3 cities could see an increase in bookings as travelers become more cost-conscious post-pandemic. It also creates opportunities for local tourism businesses to attract more visitors without significant price barriers.

Industry experts believe that this decision could improve occupancy rates across budget and mid-range hotels. For families, working professionals, and even students traveling for exams or short stays, the reduced tax directly lowers overall costs. On the other hand, hoteliers see this as a step that could help them recover faster after years of sluggish growth during the pandemic and economic slowdown.

The GST Council’s recommendation also highlights the government’s effort to balance revenue collection with economic revival. By easing the tax burden on moderately priced rooms, it signals support for both domestic tourism and employment generation in the hospitality industry, which is one of the largest job providers in India.

In conclusion, the revised GST slab on hotel tariffs under ₹7,500 offers a win-win situation for travelers and hotels. It encourages affordable tourism, strengthens local economies, and provides much-needed relief to a sector that plays a crucial role in connecting people and cultures across India