Showing posts with label GST rate cut on Hotel Room. Show all posts
Showing posts with label GST rate cut on Hotel Room. Show all posts

Saturday, 21 September 2019

GST rate cut on room tariffs; Double bonanza

*Hotels: GST rate cut on room tariffs; Double bonanza (Corp + GST cut)*

• FM today provided bonanza to corporates with reduction in tax rate from 34.3% to 25.2%.
• *GST council has provided another booster shot.* 
• *GST rates on room tariffs has been reduced as under*
*ADR upto*
Rs 1,000 – nil
Rs 1,000-Rs 7500 – from 18% to 12% and
Rs 7,500+ - from 28% to 18%
• *This should help Hoteliers to stimulate demand and consequently raise tariffs.* 
• Tax rates on hotels especially in the luxury segment had been one of the highest in India. 
• Government focus to boost domestic and inbound tourism (large gross foreign exchange earner of ~Rs 2tn) is constructive. 
• *GST cut as positive for all the branded hotel companies viz. IHCL, Lemon Tree, EIH and Chalet.*
• *After three consecutive years of healthy demand (likely minor blip in FY20 due to slowdown till now), it would be surprising if Hotel cos fail to capitalize on ARR growth.*