Branded mid-market and luxury hotels have a reason to cheer because the GST Council on Sunday relaxed the criteria for imposing the goods and services tax (GST) on hotel rooms. The Council decided that the 28 per cent GST would be imposed on hotel rooms with a tariff of Rs 7,500 above against the previous proposal of Rs 5,000 and above.
Rooms with tariffs between Rs 2,500 and Rs 7,500 will attract 18 per cent. The GST on restaurants in five-star and luxury hotels has been reduced from 28 to 18 per cent, bringing it at par with standalone air-conditioned restaurants. Food & beverages form 30-40 per cent revenue for five-star hotels.