Travel Gets Affordable: GST Cut Makes Mid-Range Hotels Up to Rs. 525 Cheaper

As the revised Goods and Services Tax (GST) rates come into effect, hotel rooms priced at Rs 7,500 or less per night will become cheaper by up to Rs 525. Currently, hotel rooms with a daily tariff of up to Rs 7,500 attract 12 percent GST with ITC.

From Monday, hotel rooms priced at Rs 7,500 or less per night will become cheaper by up to Rs 525, as the revised Goods and Services Tax (GST) rates come into effect.

By reducing GST on these hotel rooms from 12% with ITC to 5% without ITC, the government has opened the door for more affordable stays, higher sectoral revenues, and better innovation for travelers across India.

One of the popular hotel’s MD and COO said, “The simplified tax structure provides much-needed clarity for hotel operators and travelers, enabling long-term planning and reinforcing confidence in the industry’s growth trajectory.”

One of the Market Managing Directors said, India’s travel and hospitality sector is growing fast, and the GST change has come at the right time. The biggest impact will be on mid-range hotels, where the growing middle class wants good quality stays at affordable prices. The new tax rates will also make travel cheaper in Tier 2 and Tier 3 cities, where more budget-conscious travelers are driving demand.

Travelers will now get around 7% relief on hotel tariffs up to Rs. 7,500, capped at Rs. 525 per night. They’ll also benefit from lower GST on food. But the industry says reforms should be broader and continue to allow ITC credit.