HRAWI Welcomes 5% GST on Mid-Tier Hotels, Appeals For ITC Restoration To Ensure Competitiveness

“The reduction of GST to 5 per cent on hotel accommodation services with room rates up to Rs. 7,500/- per night is a welcome move. It significantly improves our competitiveness with other Asian tourist destinations and will boost both domestic and inbound tourism. We also applaud the Government's decision to reduce GST rates on essential input materials and food items, including the reduction on cakes, pastries and namkeens sold at standalone bakeries. This will make these items more affordable for consumers. However, it is disheartening to see that the Input Tax Credit (ITC) benefits have been withdrawn for this 5 per cent GST slab. A GST regime without ITC defeats the very purpose of the new tax system, as it cascades taxes and creates embedded costs. This will give rise to new complexities and severely impact businesses with high operational costs, such as rentals and brand management fees.

We urgently request the Government to restore ITC benefits to ensure the long-term health and competitiveness of the industry. Furthermore, we eagerly await clarification on the 'specified premises' notification to fully understand the implications of delinking F&B services from room tariffs,” says Mr Pradeep Shetty, Spokesperson, Hotel and Restaurant Association (Western India) – HRAWI.

About the Hotel And Restaurant Association (Western India) – HRAWI

The Hotel And Restaurant Association (Western India) – HRAWI is a 75 years old Association of Hotels and Restaurants in Western India. Its members include Restaurants and Hotels up to 5-Star Deluxe categories. With membership base spread across Western India, HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and Union Territory of Dadra and Nagar Haveli and Daman and Diu, and is considered to be the voice of the Hospitality Industry. The association is part of the national body of the Federation of Hotel & Restaurant Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr J.R.D. Tata.