Hotline: 1800 102 2007
X
Search Business Opportunities
May, 20 2017

​GST makes staying at five-star, dining out more expensive

Under the new GST scheme, low-budget and non AC restaurants will have to charge 12%. Until now, small establishments charged 6% tax

The new GST regime could make staying at a five-star hotel and eating out more expensive.

The government has decided to tax five star hotel services at the highest slab of 28%, much more than the combined service tax (6%) and luxury taxes levied at different rates by individual states at present. This comes as a bad news for hotel owners.

Kamlesh Barot, Director, Revival Group of Hotels said, “This additional burden will have to be borne by the consumer. There will be an increase in bills.”

The new GST regime will also be huge blow to low-budget and non AC restaurants. Under the new GST scheme, low-budget and non AC restaurants will have to charge 12%. Until now, small establishments charged just 6% tax. Apart from this, the GST on hotel rooms in the price range of Rs 2,500-Rs 5,000 will be 18%.

Achin Khanna, MD, Consulting and Valuation, HVS (South Asia), said, “Levying 28% on hotels charging more than Rs 5,000 is atad unfair. The premise seems to be that if you are paying that much, then it’s a luxury. That is certainly not true in this day and age. The tax burden will be borne either by the hotel ownership because they may have to offer all inclusive rates to remain competitive (in leisure markets) or by the end-user, who will be subject to higher tax because he is travelling on work or business (in corporate markets).”

Comment
Related opportunities
  • Ice creams & Yogurt Parlors
    About Thanco's Natural ice cream :-Though many things have changed from..
    Locations looking for expansion Karnataka
    Establishment year 2006
    Franchising Launch Date 2016
    Investment size Rs. 10lac - 20lac
    Space required 100 - 1000 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Bangalore Urban District Karnataka
  • India’s first dedicated Pay-Per-Workout gym! Identifying the tendency of Indians not..
    Locations looking for expansion New Delhi
    Establishment year 2017
    Franchising Launch Date 2017
    Investment size Rs. 50lac - 1 Cr.
    Space required 1500
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater South Delhi New Delhi
  • Quick Service Restaurants
    About Us  Wafflin' Around is a waffle cafe in the heart..
    Locations looking for expansion Delhi
    Establishment year 2017
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • Real Estate Sub
    Mini Homes ! Based out of Mumbai , Mini Homes is..
    Locations looking for expansion Maharashtra
    Establishment year 2008
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 150
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities