1 year of GST- Hotel and Restaurant Association of Western India

1 year of GST- Hotel and Restaurant Association of Western India

“Initially GST came as a shock for the industry due to the variable tax bracket based on the hotel room tariffs. The tax rate for eating out at restaurants too was formerly declared at 18 percent but was later resolved and brought down to 5 percent but without ITC, which remains a concern. The non-availability of ITC is a big issue for enterprises since they can no longer set off expenditures on capital investments and rentals which are huge especially in a city like Mumbai. There were many grey areas which caused uncertainties but were clarified and resolved over time by the GST Council. The high rate of 28 percent continues to remain a concern as stays are expensive for both domestic and international tourists. Tourists prefer traveling to our neighboring countries including Sri Lanka, Bhutan or even Thailand over India because these countries have lower taxes compared to ours. For group travelers, India is unviable for tourists on account of the high GST. Tourists can stay for a longer duration in a country like Sri Lanka as against the same spends in India because of the high GST. One of the major issues for MICE in the hotel industry has been the unavailability of ITC benefit for the corporate sector. The HRAWI has been requesting the Government to allow enterprises to provide set off against taxes spent for business activities in different States. There was a nominal slump on account of the compliances issues, initially and which created confusion but has been sorted out now. The biggest worry remains that we are losing out on tourism due to high taxes and we are hoping that the Government will consider it,” Mr. Dilip Datwani, President, Hotel and Restaurant Association of Western India (HRAWI).

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