GCCI seeks Uniform 12% GST Rate for Hospitality

The Goa Chamber of Commerce and Industry (GCCI) has urged Union Finance Minister Nirmala Sitharaman to decrease the GST rate on all hotel reservations to 12%. This decision will boost Goa’s hotel sector, which competes with destinations such as Sri Lanka and Southeast Asian countries with more competitive tax structures.

GCCI wrote to the finance minister, requesting that restaurants be offered the option of 5% GST without input tax credit or 12% GST with input tax credit.

“Uniform GST rates for hotel accommodation will make travel more affordable and boost the tourism sector of India,” the GCCI announced.

Currently, the GST rate for hotel rooms varies by room tariff, with 12% for tariffs up to Rs.7,500 per night and 18% for tariffs beyond Rs.7,500 per night. These inputs are part of the pre-budget recommendations for the Union Budget 2025-26. Rationalising GST rates and slabs is critical for correcting inverted duty structures, preventing cascading consequences, and reducing classification conflicts.

“Reviewing ‘blocked’ credits and state taxes are equally critical to ensure an uninterrupted value chain,” the GCCI stated in its wishlist.

According to GCCI director general Sanjay Amonkar, the suggestions include a priority on tax simplification, ease of doing business, and steps to boost economic growth while resolving ongoing problems, litigation, and uncertainty caused by frequent revisions.

The GCCI stated that the review to streamline income tax regulations is a step in the right direction but needs to provide relief to taxpayers.

The GCCI advised that amendments should take effect at the start of the financial year.

“Under the new tax regime, the basic income tax exemption level is proposed to be raised to Rs 5 lakh and rebates under Section 87A to be increased to Rs 10 lakh as well”, Amonkar stated.