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GST on hotel rooms: No plans to approach Council for rate reduction, says Tourism minister

Wednesday, February 3, 2021, 10:00 Hrs  [IST]
HBI Staff | Hyderabad

According to The Hindu, 

The tourism ministry has no plans to approach the GST Council for reducing the goods and services tax on all hotel rooms to 12 per cent, Union Tourism Minister Prahlad Patel said on Tuesday.

The ministry is aware of the tax levied on various tourism products and services, including hotels. The same directly impacts the country's tourism competitiveness vis-a-vis other countries, he said in a written reply in Rajya Sabha.

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"At present, the Ministry of Tourism has no plan to approach the GST Council for reducing GST (goods and services tax) on all hotel rooms to 12 per cent, since the GST Council decides the rate of taxation after taking into consideration the factors affecting various segments of business as well as to ensure optimum revenue generation required for overall development of the economy," Patel said.

Changes in GST slabs
He also informed the House that the tourism ministry has taken up the issue of GST with the Ministry of Finance from time to time and some changes have been made to the GST slabs for the sector.

The threshold limit for the applicability of 28 per cent GST was increased from INR 5,000 to INR 7,500 per room per day by the finance ministry. Patel said the basis for determining the applicable rate has been changed from declared tariff to actual tariff.

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