Simplifying GST for hotels and restaurants and lowering GST rate for meetings, incentives, conferences, and exhibitions for international tourists will help make the sector more competitive and viable for foreign visitors.
"We suggest lowering the 18% GST on hotel rooms priced above ₹7,500 to 12%, bringing it in line with other Asian countries. Additionally, we recommend reducing GST for hotel restaurants to 12% with full input tax credit (ITC), making them more competitive compared to standalone restaurants that currently have a 5% GST rate without ITC," he said.
Kachru added that there is a need to rationalise taxes on Indian consumers as well. “Countries like Thailand, Singapore, Sri Lanka, and others in Asia are gaining advantage over us as they are also looking to tap into the same travel wallets of Indians, who also spend money in India.”
"Hotels in India are dealing with rising costs, and there needs to be some rationalization of the taxes imposed on them. India is also at a disadvantage when it comes to large-ticket events, both in weddings and meetings," he said.
Although the association has been advocating for infrastructure status for several years, it has yet to receive the associated benefits. Hotels can receive infrastructure status only if they meet certain criteria, like a very large-scale development of a certain size and cost. If that changes, he said, developers would be able to access better project financing, easier access to bank loans, lower development costs, and some types of tax incentives.