Cheaper to check-in: 5% GST for hotel rooms under Rs 7,500

MUMBAI: Guests of budget and mid-market hotels will benefit the most from the government's decision to reduce GST on rooms costing up to Rs 7,500. The GST has been lowered from 12% with input tax credit (ITC) claims to 5% without ITC.

The new rate will be effective from September 22. The 12% GST threshold for rooms priced at Rs 7,500 was established eight years ago. The new GST rate is expected to increase revenue by 7-10% for players in the budget and mid scale hospitality segments. About two-thirds of Brigade Hotel's room inventory is priced below Rs 7,500, while at Sarovar Hotels, around 25% of its rooms fall below this threshold.