On May 19, when Union Finance Minister, Arun Jaitley announced the launch of Goods and Services Tax (GST), applicable from July 1, the proposed GST rates angered the hospitality sector.
On June 18, the GST Council relaxed rates in restaurants at 5-star and luxury hotels from 28 per cent on the total bill to 18 per cent.
A 28 per cent GST was imposed on hotels charging upwards of ₹5,000 per room per night. Now, room tariffs between ₹2,500 and ₹7,500 will attract 18 per cent GST, and the 28 per cent GST will be imposed on room rates upwards of ₹7,500.
On its website, Federation of Hotel and Restaurant Associations of India (FHRAI) said, “It is expected that this measure will benefit a majority of our hotel members. FHRAI will continue tirelessly to espouse the cause of its members in future and will aim at securing 18 per cent GST for all our hotel members.”