CHAPTER-1

INTRODUCTION

The Goods and Services Tax (GST) implementation has had a significant impact on various
sectors of the economy, including the hotel, tourism, and travel industry. The study of the
impact of GST on these sectors has been an area of great interest and concern for
policymakers, economists, and industry experts.

The introduction of GST, a comprehensive indirect tax reform, aimed to unify the Indian
market, simplify the tax structure, and bring about transparency in the tax system. In the
context of the hotel, tourism, and travel industry, the implementation of GST brought both
opportunities and challenges.

For hotels, the GST regime streamlined multiple taxes into a single tax structure, eliminating
the complexities of various state and central taxes. However, the rate at which hotels were
taxed under GST, along with the classification of different room tariffs, had a direct bearing
on pricing strategies, operational costs, and consequently, on customer demand.

In the tourism and travel sector, the impact of GST was multi-faceted. It influenced airfares,
tour packages, and other travel-related services. GST introduced both advantages and
complexities in the sector, affecting the cost structure of services and impacting customer
choices and behaviours.

The study on the impact of GST on the hotel, tourism, and travel industry delves into
analysing the changes in pricing, operational efficiency, customer behaviour, and overall
market dynamics post-GST implementation. This examination involves understanding how
businesses in these sectors adapted to the new tax structure, altered pricing strategies, and
coped with the associated operational challenges. Additionally, it evaluates the effect of these
changes on consumer spending patterns, tourism trends, and the overall growth of the
industry.

The research aims to provide insights into the adaptation of businesses, the consumer
response to pricing changes, and the overall economic impact on the hotel, tourism, and
travel industry since the implementation of GST. Understanding these implications is crucial
for industry stakeholders, policymakers, and businesses to strategize and navigate the
evolving landscape in the post-GST era.

The Goods and Services Tax (GST) implementation in any industry triggers a significant re-
evaluation of its economic landscape, and the hotel, tourism, and travel sector is no
exception. The impact of GST on these interconnected sectors has been a subject of rigorous
study and analysis. This tax reform, introduced to streamline and unify India's complex
taxation system, has led to both positive and challenging outcomes in the hospitality and
travel industry. The study aims to explore and analyse the multifaceted effects of GST on
hotels, tourism, and travel, encompassing changes in pricing, customer behaviour, operational
strategies, and overall industry growth. Through an in-depth examination, this study seeks to
shed light on the nuanced ways in which GST has influenced the financial, operational, and
competitive dynamics within these sectors, ultimately contributing to a comprehensive
understanding of its impact on businesses, consumers, and the overall economy.

The Goods and Services Tax (GST) implementation has significantly impacted various
sectors of the economy, particularly the hotel, tourism, and travel industry. This study seeks
to comprehensively examine the multifaceted effects of GST on these interconnected sectors.
With the introduction of GST, these industries experienced a fundamental shift in their
taxation structure, transitioning from a complex web of multiple taxes to a unified taxation
system. This change brought both challenges and opportunities, influencing pricing
strategies, operational costs, and consumer behaviour within the hospitality and travel
domains. The study aims to analyse the direct and indirect implications of GST on these
industries, considering aspects such as pricing dynamics, consumer demand, competitive
positioning, and overall market trends. By exploring the ramifications of GST on the hotel,
tourism, and travel sectors, this study aspires to provide valuable insights for stakeholders,
policymakers, and industry players to better understand and adapt to the evolving landscape
shaped by this tax reform.

The Goods and Services Tax (GST) has been a transformative taxation system implemented
in many countries worldwide, aimed at streamlining and unifying the tax structure. In the
context of the hotel, tourism, and travel industry, the impact of GST has been a subject of
extensive study. This examination encompasses various aspects, including the economic
implications, customer behaviour, and operational dynamics within these sectors. The
introduction of GST in these industries has provoked a spectrum of responses, ranging from
initial challenges to potential long-term benefits. Understanding the nuanced impact of GST
on hotel accommodations, tour packages, travel services, and related segments is crucial in
evaluating how this taxation policy influences pricing, consumer choices, and the overall
growth of these interconnected industries. The study delves into the multifaceted
repercussions, exploring both the short-term adjustments and the broader implications for the
future of hospitality, tourism, and travel businesses under the GST framework.

The implementation of the Goods and Services Tax (GST) has sparked significant interest
and speculation regarding its impact on various sectors, particularly the hotel, tourism, and
travel industry. This comprehensive study aims to delve into the multifaceted repercussions
of GST on these intertwined sectors. Given that the hotel, tourism, and travel industry
constitutes a vital segment of the economy, the introduction of GST has brought both
anticipation and concerns regarding its effects. This research endeavours to analyse the direct
and indirect consequences of GST, including its influence on pricing, consumer behaviour,
operational costs, and the overall economic landscape of these sectors. By scrutinizing these
aspects, this study seeks to shed light on the transformative effects of GST, providing
valuable insights into how it shapes the landscape of hospitality, tourism, and travel services.

INTRODUCTION ABOUT /TO GST:-

India, as world’s one of the biggest democracies in the world, follows the federal tax system
for levy and collection of various taxes. Different types of indirect taxes are levied and
collected at different points in the supply chain. The Centre and the States are empowered to
levy respective taxes as per the Constitution of India. The Value-added tax (VAT), when
introduced, was considered to be a major improvement over the pre-existing central excise
duty at the national level and the sales tax at the state level. Now the Goods and Service Tax
(GST) has been a further significant breakthrough – the next logical step towards
a comprehensive indirect tax reform in the country.

The Goods and Services Tax (GST) has been the biggest and substantial indirect tax reform
in India since 1947. The main idea of GST was to replace the then existing taxes like value-
added tax, excise duty, service tax and sales tax. GST as it is known as all set to be a game
changer for the Indian economy.

GST was launched at midnight on 1st July 2017 by the president of India, Pranab Mukherjee
and Prime Minister, Narendra Modi. The launch was marked by a historic midnight session
of both houses of the Parliament convened at the central hall of the Parliament. The 122nd
Amendment Act Bill sought to amend the constitution to introduce the GST wide proposed
new article 246A. This new article gave power to Legislature of every state and Parliament to
make laws with respect to GST where the supplies of goods or of services take place. GST
has been applicable throughout India, and has replaced multiple cascading taxes levied by the
Central and State Government.

GST is levied at all stages right from manufacture/import of goods up to final consumption
with credit of taxes paid at previous stages available as credit against output tax liability
arising out of the outward supply ( popularly known as seamless flow of credit of taxes). In a
nutshell, only value addition is to be taxed and burden of tax is to be borne by the final
consumer.

MEANING OF GST:-

The goods and services tax (GST) is a value-added tax levied on most goods and services
sold for domestic consumption. The GST is paid by consumers, but it is remitted to the
government by the businesses selling the goods and services. In effect, GST provides revenue
for the government.

World’s first country implemented GST is France (in the year 1954). More than160
countries have implemented GST system. Framework of GST in India had formed 17 years
ago. The first move on GST implementation in India was begun on July 17, 2000, under
Vajpayee Government. In 12 August 2016, Assam became the first state to pass GST. On
September 23, 2016, GST Network was formed, it is an online network designed to solve the
problems and questions of customers and businessmen.

DEFINITION

The Goods and Services Tax (GST) is a value-added tax levied on most goods and
services sold for domestic consumption. The GST is paid by consumers, but it is remitted
to the government by the businesses selling the goods and services. In effect, GST provides
revenue for the government”

INTRODUCED GST

It played a crucial role in shaping the GST framework in India. On July 1, 2017, GST laws
were implemented, replacing a complex web of Central and State taxes. Under the Indian
GST, goods and services are categorized into different tax slabs, including 5%, 12%, 18%,
and 28%.

Goods and Services Tax (GST) was introduced in India on July 1, 2017. Here's a brief
overview in simple points:

 What is GST: GST is a unified tax system that replaced multiple indirect taxes like
service tax, excise duty, VAT, etc.

 One Nation, One Tax: It aimed to create a single, comprehensive tax structure for the
entire country.

 Tax Structure: It's structured into different tax slabs - 0%, 5%, 12%, 18%, and 28%,
with some goods and services exempted or placed under lower or higher rates.

 Dual System: GST operates under a dual model where both the Central and State
governments collect tax at different rates but through a single platform.

 Simplification: It aimed to simplify the taxation process for businesses by reducing

tax cascading and complexities.

 Online System: GST introduced an online portal for tax filing and compliance,
making the process more digitized and streamlined.
  Impact: It impacted various industries and consumers, aiming to bring more
transparency, efficiency, and ease in taxation.

 Challenges: Implementation initially faced some challenges due to adaptation,

understanding of new rules, and technological readiness.

 Reforms: Amendments and reforms have been continuously made to streamline the
process and address various issues raised by stakeholders.

Overall, GST aimed to revolutionize India's tax system, unifying and simplifying the tax
structure while enhancing economic efficiency.

JOURNEY OF GST IN INDIA:-

Following is the timeline from conception to implementation of the biggest tax reform, called
GST.

 2000 – First GST Committee was set up under the then finance minister of Bengal,
Mr. Asim Dasgupta with the objective of designing and establishing a GST model as
per the Indian federal structure.

 2003: Vijay Kelkar Task Force was formed under the Vajpayee government to
develop GST model.

 2004: The Task Force recommended GST to be essential to reform the tax structure.

 2006: The then FM, P Chidambaram proposed GST in the Budget speech for the first
time with April 1st, 2010 as the deadline for GST implementation.

 2008: Empowered Committee (EC) of state finance ministers finalized the model and
road map for GST implementation.

 2009: EC released First Discussion Paper (FDP) in the public domain.

 2010: Computerization of state commercial taxes started, but GST implementation

was postponed.

 2011: 115th Constitution Amendment Bill was introduced in Lok Sabha.

 2012: Parliamentary Standing Committee started discussion over the GST Bill.

 2013: The Standing Committee tabled the report in Parliament suggesting some
changes.

 2014: 122nd Constitution Amendment Bill was introduced in LokSabha.

 2015: GST Bill passed in LokSabha, but not in Rajya Sabha

 2016: Constitution Amendment Bill/GST Bill was passed in both the houses.
  2017: CGST, SGST, IGST and Compensation Cess Bills were passed. Finally, GST
was implemented on 1st July, 2017.

ABOUT GOODS AND SERVICES TAX NETWORK(GSTN):-

“Goods and Services Tax” Network (GSTIN) is a non-profit organisation, set up by the
Government as a private company under erstwhile Section 25 of the Companies Act,
1956.The main purpose of GSTN is to create a website/platform for all the GST related
concerned parties, namely stakeholders, government and taxpayers to collaborate on a single
portal. GSTN would provide three front end services, namely registration, payment and
return to taxpayers. Besides providing these services to the taxpayers, GSTN would be
developing back-end IT modules for 25 states.

Infosys is appointed as Managed Service Provider (MSP) at a total project cost of around
Rs1380 crores for a period of five years. GSTN has selected 34 IT, ITeS and financial
technology companies, to be called GST Suvidha Providers (GSPs).

GST Rate Classification:-

  0% - Essential food and medicines, newspaper, education services, residential
accommodation.

 5% - Common use items, sweets, restaurant services, goods transport services.

 12% - Frozen meat, butter and cheese, Milk beverages.

 18% - Standard rate of goods and services.

 28% - Luxury and sin goods such as motor vehicles (additional cess imposed on
certain luxury goods).

INDIA VIEW:-

GST in being introduced for two reasons the current Indirect tax structure is full of
uncertainties due to multiple rates. Due to multiple forms, GST tax complexity in the
prevailing tax regime. The tax structure in India comprises of two taxes direct taxes and
Indirect taxes.

Direct tax includes income tax, corporate tax, and wealth tax. Indirect tax includes Excise
duty, Custom duty, Service tax, VAT and Octroi tax. Progressive tax increases the rate of tax
for increasing value or volume. Regressive tax decreases the tax rate for increases the value
or volume. Proportion tax fixed rate of tax for every level of income or production.
GST is newest and indirect taxation in India that has a huge impact a business both big and
small and change the way of economy functions. It is important to understand the current
indirect taxation system. Direct taxes such as Income tax are borne by the person liable to pay
the tax , this means that the tax burden cannot be shifted to anyone else. The liability of
indirect taxed can be shifted to another person, the person liable to pay the tax can collect the
tax from someone else and then pay it to the government, shifting the tax burden. The GST
tax fails under this category.

The current indirect tax structure comprises of central and state taxes. Central tax levied by
the central government including CST and Excise duty. State taxes levied by the various state
governments (VAT, Service tax, Octroi) it applied on Value added portion in sales price. It is
not uniform in nature; it differs from state. Different rates of taxation for different good and
services.

Need of GST:-

Goods and Services Tax (GST) is a comprehensive indirect tax that was introduced to bring
about a significant reform in the way goods and services are taxed in India. It aims to
streamline the taxation structure, reduce complexities, and bring about uniformity in the tax
regime. The primary needs and advantages of implementing GST include:

 Simplification and Uniformity: GST replaces multiple indirect taxes imposed by the
state and central governments, streamlining the tax structure and making it more
uniform across the country. It simplifies the tax process by subsuming various taxes
like VAT, service tax, central excise, etc., under one umbrella.

 Elimination of Cascading Effect: The cascading effect of taxes, where tax is levied on
tax, is minimized under GST. With input tax credit mechanisms, businesses can claim
credit for taxes paid on their inputs, reducing the tax burden on final consumers.

 Boost to Economic Growth: GST is expected to boost the economy by making it more
competitive and efficient. It can lead to increased ease of doing business and promote
exports.

 Reduction in Tax Evasion: The GST system is designed to be more transparent, with a
robust IT infrastructure that can track transactions. This reduces the chances of tax
evasion and ensures greater compliance.
  Harmonization of Taxes: The tax rates under GST are designed to be consistent across
states, making it easier for businesses to understand and comply with the tax structure.

 Simplified Compliance: With a unified system and a single online platform for tax
filings and payments, compliance procedures are expected to become more
straightforward for businesses.

 Benefit to Consumers: GST aims to benefit consumers by reducing the overall tax
burden on goods and services. It is expected to bring down prices in the long run due
to a more efficient tax system.

 Reduction in Logistics and Production Costs : Removal of state barriers and a uniform
tax structure reduce logistics and production costs for businesses, enabling them to
operate more efficiently.

 Improved Revenue Collection: With a wider tax base and better compliance, GST is
expected to increase tax revenues for both the central and state governments.

Overall, the implementation of GST was a significant step towards modernizing India's tax
system, aiming to create a more efficient, transparent, and simplified tax structure, benefiting
businesses, the government, and consumers alike.

INDIA’S ADOPTION OF GST:

The GST was launched at midnight on 1 July 2017 by the President of India, and the
Government of India. The launch was marked by a historic midnight (30 June – 1 July)
session of both the houses of parliament convened at the Central Hall of the Parliament.
Through the session was attended by high- profile guests from the business and the
entertainment industry including Ratan Tata, it was boycotted by the opposition due to the
predicted problems that it was bound to lead for the middle and lower class Indians. It is one
of the few midnight sessions that have been held by the parliament the others being the
declaration of India’s Independence on 15 August1974, and the silver and golden jubilees of
that occasion. After its launch, the GST rates have been modified multiple times, the latest
being on 22 December 2018, where a panel of federal and state finance ministers decided to
revise GST rates on 28 goods and 53 services.
India adopted the Goods and Services Tax (GST) on July 1, 2017. The GST replaced a
complex system of multiple indirect taxes with a unified tax structure across the country.
Here's a simple breakdown:

 Replacement of Multiple Taxes: The GST amalgamated various indirect taxes like
service tax, central excise duty, state-level value-added tax (VAT), and others into a
single tax.

 One Nation, One Tax: It aimed to create a unified market by standardizing tax rates
and procedures across all states and union territories of India.

 Tax Structure: The GST introduced a four-tier tax structure with different tax rates
(5%, 12%, 18%, and 28%) for different goods and services. Some essential items
were taxed at 0% or exempted.

 Input Tax Credit: Businesses could claim credit for the GST they paid on their
inputs, reducing the tax burden along the supply chain.

 Digitization: The GST system is largely technology-driven, with online filing,

registration, and payment of taxes, which aimed to streamline processes and reduce
paperwork.

 Economic Impact: The GST was expected to boost economic growth, improve tax
compliance, and make India a more attractive destination for foreign investment by
creating a single, transparent tax system.

The implementation of the GST in India aimed to simplify the tax structure, reduce cascading
of taxes, and create a more efficient and transparent tax system for both businesses and
consumers.

OVERVIEW OF GOODS AND SERVICE TAX IN INDIA

The Goods and Services Tax (GST) in India, implemented on July 1, 2017, stands as a
landmark indirect tax reform. It replaced a complex structure of multiple indirect taxes levied
by the central and state governments, unifying them into a single comprehensive tax. GST
streamlined the taxation system by amalgamating various levies like excise duty, service tax,
and value-added tax (VAT). It operates on a dual model, dividing the tax structure between
the central and state governments. This taxation system is structured into four primary tax
slabs—5%, 12%, 18%, and 28%, with specific goods and services attracting no tax or falling
under the zero-tax category. GST has aimed to simplify the taxation process, eliminate the
cascading effect of taxes, enhance compliance, and boost economic growth by creating a
more uniform tax structure across the country, although it has met with both praise and
critique since its implementation. The continual refinement of GST processes and periodic
revisions in tax rates reflect the government's commitment to adapting and evolving this tax
reform for the betterment of the Indian economy.

Goods and Services Tax (GST) in India is a comprehensive, destination-based indirect tax
that was implemented on July 1, 2017. Here's an overview of GST in points:

 Single Tax Structure: GST replaced multiple cascading taxes imposed by the central
and state governments, unifying them into a single tax structure across the country.

 Four-Tier Tax Structure: GST has four tax slabs - 5%, 12%, 18%, and 28%.
Additionally, certain goods and services are categorized under 0% tax or are
exempted.

 Dual Administration: GST is administered by both the Central and State

governments, where the Central GST (CGST) and State GST (SGST) are applicable
on intra-state transactions. Integrated GST (IGST) is applicable on inter-state
transactions.
 Input Tax Credit (ITC): Businesses can claim tax credit on inputs used in the supply
of goods or services, which helps eliminate the cascading effect of taxes and reduces
the final cost to the end consumer.

 Composition Scheme: Small businesses with an annual turnover below a certain

threshold can opt for a composition scheme and pay tax at a fixed rate based on
turnover, with reduced compliance requirements.

 GSTN (Goods and Services Tax Network): It's the IT infrastructure that manages
the entire GST system, including registrations, return filings, and tax payments.

 Threshold for Registration: Businesses whose turnover exceeds a specified

threshold limit (currently INR 40 lakhs for most states, INR 20 lakhs for some special
category states) need to register under GST.

 Exemptions and Zero-Rated Supplies: Certain essential goods and services such as
fresh produce, healthcare, and education are exempt or taxed at 0%. Exported goods
and services are considered zero-rated, i.e., taxed at 0%.

 Compliance and Filing: Businesses are required to file regular GST returns
(monthly, quarterly, or annually, based on the type of business) detailing their sales
and purchases.

 GST Council: A constitutional body that determines tax rates, exemption limits, and
other policies related to GST, comprising representatives from the Central and State
governments.

 E-way Bill: It's an electronically generated document required for the movement of
goods valued above a specified amount within or between states.

 Anti-Profiteering Authority: To ensure businesses pass on the benefits of reduced

tax rates to consumers, an authority is in place to monitor and address any non-
compliance.

 GST on Services: Services are categorized under various tax rates, with some
specific services attracting a higher rate, while essential services like healthcare and
education are often exempt or taxed at a lower rate.
GST has significantly transformed India's taxation system by bringing in transparency,
reducing economic barriers between states, and simplifying tax compliance for businesses.

PURPOSE OFGST:-

The Goods and Services Tax (GST) serves several purposes in a country's economy:

 Simplification: It simplifies the taxation system by replacing multiple indirect taxes

with a single tax, making it easier for businesses to comply with tax regulations.

 Uniform Taxation: It creates a uniform tax structure across the country, ensuring
consistency in tax rates and procedures, regardless of the state or region.

 Reduced Tax Cascading: GST helps eliminate "tax on tax" or tax cascading by
allowing businesses to claim credit for taxes paid on their inputs. This reduces the
overall tax burden on goods and services.

 Boosts Economic Growth: It can stimulate economic growth by making goods and
services more affordable and encouraging production and consumption.

 Wider Tax Base: GST broadens the tax base by bringing more entities under the tax
net, which can potentially increase tax revenues for the government.

 Transparency: It promotes transparency in the taxation system, as it requires

businesses to file returns online, making the process more visible and trackable.

 Reduction in Black Money: By creating a more transparent system, GST can

potentially reduce instances of tax evasion and the circulation of black money in the
economy.

These purposes collectively aim to create a more efficient, transparent, and simplified tax
system that benefits both businesses and the overall economy.

COMPONENTS OF GST:-
There are three components of GST as follows : -

• Central Goods and Services Tax (CGST): payable to the Central Government on supply of
goods and services within the State/Union Territory.

• State/Union Territory Goods and Services Tax (SGST/UTGST): payable to the State/Union
Territory Government on supply of goods and services within the State/Union Territory.

• Integrated Goods and Services Tax (IGST): in case of inter-state supply of goods and
services, IGST is levied by the Government of India. Equivalent IGST is also levied on imports
into India. IGST shall be apportioned between the Union and the States as per the provisions
of IGST Act.

• GST Compensation Cess: In addition to GST, a cess named GST Compensation Cess can be
levied on notified goods and services and currently such cess is levied on pan masala,
tobacco, aerated drinks, cars and coal.

IMPORTANCE:-

 Simplification: GST (Goods and Services Tax) simplifies the tax structure by
replacing multiple taxes like service tax, excise duty, VAT, etc., with a single
comprehensive tax. It streamlines the taxation process.
  One Tax, One Nation: It unifies the country into a single market by removing state
borders for tax purposes. This creates a more uniform tax structure across India,
making it easier to do business across states.

 Reduction of Tax Cascading: Under the previous tax system, taxes were charged on
taxes, leading to a cascading effect. With GST, the system allows for the offset of
previous taxes paid, reducing the cascading effect and overall tax burden.

 Boost to Economy: GST aims to boost the economy by making goods and services
more affordable. It reduces the cost of doing business and enhances ease of trade,
potentially leading to economic growth.

 Transparency and Compliance: The implementation of GST encourages better

compliance as it's a more transparent system. It minimizes tax evasion due to its
digital nature and the tracking of transactions.

 Beneficial for Consumers: GST is designed to benefit consumers by potentially

reducing the prices of goods and services, making them more affordable due to the
elimination of multiple hidden taxes.

 Digital and Streamlined System: It's a technology-driven system, making tax

compliance and procedures more straightforward, reducing paperwork, and making
the process more efficient.

In summary, GST is important because it simplifies the tax structure, unifies the country as a
single market, reduces tax burden, boosts the economy, enhances transparency, benefits
consumers, and introduces a more efficient and technology-driven tax system.

HOTEL INDUSTRY:-
HOTEL INDUSTRY:-

The hotel sector will reap the benefits of standardized and uniform tax rates under the Goods
and Service Tax, and easy and better utilization of input tax credit. The final cost to end user
will also decrease; this may help the hotel industry to attract more overseas tourists than
before. This would result in improved revenues for the government and help in economic
growth. There are many advantages of GST regime which could help in the growth of hotel
industry in the long run. For instance, complementary food (like breakfast) was earlier taxed
separately under VAT, but now it will be taxed under GST as a bundled service.

The GST rates for hotel industry are given in detail below:

 For rooms with a tariff of less than ₹1,000 per day, there was no GST.
 For rooms with tariffs between ₹1,000 and ₹2,500 per day, the GST rate was
12%.
 For rooms with tariffs between ₹2,500 and ₹7,500 per day, the GST rate was
18%.
 For rooms with tariffs above ₹7,500 per day, the GST rate was 28%.
  Tax Rates: Under GST, hotels are categorized into different tax brackets based on
their room tariffs. They are classified into different slabs—usually, 0%, 5%, 12%,
18%, or 28%. The rate charged to the customer depends on the declared room tariff.

 Room Tariffs: Hotels charging less than ₹1,000 per night typically don't attract
GST. Room rates between ₹1,000 and ₹7,500 are charged at different GST rates, and
those charging more than ₹7,500 fall into a higher bracket.

 Input Tax Credit (ITC): Hotels can claim input tax credit for taxes paid on goods
and services utilized in their operations. This enables them to offset taxes paid on
inputs against the final tax liability, thereby reducing the overall tax burden.

 Impact on Customers: The GST system brought uniformity in taxation across the
country, simplifying the tax structure for customers. However, the applicable tax
rates and their impact on room prices differed based on the hotel's classification and
room tariffs.

 Filing Procedures: Hotels are required to comply with GST regulations, including
filing returns, maintaining proper records, and adhering to the input tax credit
mechanism.

 GST Compliance: The hotel industry faced challenges in adapting to the new tax
system initially, particularly in understanding the various tax slabs, implementing
changes in invoicing, and ensuring compliance with GST regulations.

TOURISM INDUSTRY:-
The tourism industry refers to the business activity related to providing goods and services to
travellers. It includes various sectors such as transportation, accommodation, food and
beverage, entertainment, and other services that cater to tourists. In simple terms, it
encompasses all the businesses and activities involved in serving people who are traveling for
leisure, business, or other purposes.

 Hotels and Lodging:-

 Hotels and lodges are categorized based on their room tariffs. GST rates are
different for different categories based on the room tariffs per night.

 For rooms with a tariff of up to Rs.1,000, there might be no tax or a minimal

tax rate.

 For rooms with a tariff between Rs.1,001 to Rs.7,500, the tax rate may range
between 12% to 18%.

 Rooms with tariffs above Rs. 7,500 might attract an 18% GST rate.

 Tour Operators:

 Services provided by tour operators generally fall under the 5% GST bracket.

 Air Travel:

 Domestic air travel attracts a 5% GST on economy class and 12% on business
class for tickets.

 International air travel also attracts a 5% GST.

 Transportation Services:

 Services provided by cabs, taxis, and transportation services might come under
different GST rates based on their classification.
  Restaurants:

 The GST rates for restaurants are separate and might differ based on whether
they are air-conditioned or non-air-conditioned.

TRAVEL INDUSTRY:-

The travel industry refers to the sector of the economy that involves all services, products,
and activities related to travel, tourism, and hospitality. It encompasses a wide range of
businesses, including transportation (airlines, railways, cruise lines, car rental services),
accommodation (hotels, resorts, hostels), travel agencies, tour operators, and various other
services catering to travelers.

This industry is vast and diverse, covering leisure travel, business travel, adventure tourism,
cultural tourism, and more. It plays a crucial role in the global economy, contributing
significantly to employment, revenue generation, and cultural exchange. The travel industry
connects people across different regions, fostering cultural understanding and economic
development through travel-related activities and services.

1. Hotels and Lodging:

 Hotels with room tariffs of up to Rs. 1,000 per day: GST rate of nil.
  Hotels with room tariffs between Rs. 1,001 and Rs. 7,500 per day: GST rate of
12%.

 Hotels with room tariffs above Rs. 7,500 per day: GST rate of 18%.

2. Restaurants:

 Restaurants (without input tax credit): GST rate of 5%.

 Restaurants in hotels with room tariffs above Rs. 7,500 per day: GST rate of
18%.

3. Air Travel:

 Economy class air travel: GST rate of 5%.

 Business class air travel: GST rate of 12%.