New Delhi, September 08, 2025: “The reduction of GST to 5 per cent on hotel accommodation services with room rates up to Rs. 7,500/- per night is a welcome move. It significantly improves our competitiveness with other Asian tourist destinations and will boost both domestic and inbound tourism. We also applaud the Government’s decision to reduce GST rates on essential input materials and food items, including the reduction on cakes, pastries and namkeens sold at standalone bakeries. This will make these items more affordable for consumers. However, it is disheartening to see that the Input Tax Credit (ITC) benefits have been withdrawn for this 5 per cent GST slab. A GST regime without ITC defeats the very purpose of the new tax system, as it cascades taxes and creates embedded costs. This will give rise to new complexities and severely impact businesses with high operational costs, such as rentals and brand management fees.
We urgently request the Government to restore ITC benefits to ensure the long-term health and competitiveness of the industry. Furthermore, we eagerly await clarification on the ‘specified premises’ notification to fully understand the implications of delinking F&B services from room tariffs,” says Mr Pradeep Shetty, Spokesperson, Hotel and Restaurant Association (Western India) – HRAWI.
Corporate Comm India (CCI Newswire)
