Stakeholders in tourism and hospitality sectors in Mysuru call GST rate cuts a ‘Dasara gift’

Mysuru’s tourism and hospitality sector has welcomed the sweeping reforms in Goods and Services Tax (GST) announced by the Union Government, which have significantly reduced slab rates across sectors, and described it as a ’Dasara gift’.

The hotel and hospitality sectors, considered the backbone of the city’s tourism-driven economy, is particularly upbeat as GST on hotel rooms has been slashed, making stays more affordable for domestic and international visitors alike.

Under the revised structure, which will kick in on September 22, GST on hotel rooms will come down from 12% to 5%.

‘’Earlier, there was no tax on rooms costing up to ₹1,000 per night, but once the tariff crossed that mark, the entire bill attracted 12% GST. Now, in a major relief, hotel tariffs up to ₹7,500 will attract only 5% GST,” said C. Narayanagowda, president, Mysuru Hotel Owners’ Association.

Welcoming the move, he said the revised GST rates is akin to a new budget. ‘’For years, we have been pressing for rationalisation of hotel tariffs under GST. During the earlier VAT regime, taxation was implemented arbitrarily, with room tariffs attracting up to 14.5% while it attracted 12% under the GST regime and rooms in the luxury segment attracted a different and a higher slab. But the revised structure is transparent, fair and tourism-friendly,” said Mr. Narayanagowda.

Apart from room rentals, food and snacks too will attract a lower GST rate. Ice cream, chats and juices, which previously attracted 18% GST, will be cheaper as they will now attract only 5% GST, said Mr. Narayanagowda

The association, along with other industry bodies, had submitted several representations to Union Ministers and State leaders, including Revenue Minister Krishna Byregowda, highlighting the burden of higher GST on the sector. “We are pleased that the Centre has listened to the feedback provided by the stakeholders,” Mr. Narayanagowda added.

Allied services too stand to gain.

Prashanth of Safewheels — a taxi rental service provider — said the reform will encourage more travel within Mysuru and neighbouring tourist circuits.

“This is a good boost for tourism. The middle class can save more. More the savings, greater is the propensity to travel, which will boost tourism,” he added. ‘’The middle class, in particular, will feel the benefit as not just hotel tariffs but food and transport will now be more affordable,“ said Mr. Prashanth.

Car rentals continue to attract 5% GST, but the stakeholders are not complaining. ‘’A 5% GST is widely considered affordable,” said Mr. Prashanth.

Industry players emphasise that beyond direct savings, the reform will give a boost to the tourism sector by way of stability and higher footfall.

For Mysuru, where tourism generates nearly 100,000 direct jobs and is a major revenue driver, the GST cuts could not have come at a better time as Dasara is round the corner, and is the peak tourism season.

The city and the Mysuru region in general attract nearly 35 lakh tourists annually. The GST rate cut could increase the footfall in the days ahead giving a boost to the tourism sector.