The cuts on rates of hotel tariffs is seen as a boon to India's MICE and wedding industries.
NEW DELHI - India's MICE and wedding industries have received a huge boost following the government's recent announcement to cut rates on hotel tariffs.
India's GST council, chaired by the country's finance minister Nirmala Sitharaman, approved the proposal to revise tax rates on hotel tariffs in order to meet the targeted growth for the industry.
The timely move is seen as a boon to the sector, which has been reeling under pressure of an economic slowdown. The move is also expected to serve a dual purpose of boosting tourism and generating more employment for the locals.
The new rules will see a tax reduction from 28% to 18% for hotels having tariffs of more than Rs7,500 (US$105) per night. For hotels with tariffs less than Rs7,500, the tax rate has been lashed from 18% to 12%.
In addition, there will be no GST on room tariffs of below Rs1,000 per night.
WHAT THEY SAY
Speaking about the impact of this move, Vishal Suri, Managing Director, SOTC Travel said, "Ahead of the peak holiday season, the revised GST rates for hotels will go a long way in strengthening the Leisure, MICE and Corporate Travel businesses and will further contribute to the growth of the Tourism sector.
"With the lowering of corporate tax rates from 30% to 22%, we are now at par with (other) South Asian countries."
Mr Vishal added: "The reforms undertaken by the Government will help businesses with higher post-tax profits and hence incentivize investments into the country, reviving the current economic growth rate. We are hopeful to witness a rise in demand and bookings."
Some experts also believe that this step by the government should also be backed by developing tourism infrastructure and lowering the tax slab in the mid-market segment which is the need of the hour to boost the hospitality sector.
Commenting on the new tax policy by the government, Neeraj Govil, senior vice president, South Asia, Marriott International said: "The recent tax cut move will impact the hospitality industry in a positive way. Sectors like MICE will especially benefit because we the industry can now look at local options. This is a welcome move and will benefit the industry in the long run."