GST cuts in hotel tariff will boost tourism sector: Tourism Minister

New Delhi: Union Tourism Minister Prahlad Singh Patel referred the recent cuts in corporate tax and GST as 'Diwali Gift'. He welcomed the decision of Modi government of reducing the tax from hotel tariff and said that it will boost up the tourism sector.

"The ministry had requested the reduction of the charges or to revise the GST slab for the tourism sector. The decision taken by the government is even better than we thought. This is a Diwali gift for the tourism industry," Patel said while addressing tourism stakeholders at the 2nd India Tourism Mart here on Monday.

On Friday Union Finance Minister Nirmala Sitharaman announced several revisions to the goods and services tax (GST) rates following the 37th GST Council meeting, for the promotion of the tourism sector. Now the GST on room tariff between Rs 1,001 and Rs 7,500 per night has been reduced to 12 per cent from 18 per cent. Similarly, tariff above Rs 7,500 will now attract 18 per cent GST against 28 per cent.

Nakul Anand, Chairman – Federation of Associations in Indian Tourism and Hospitality (FAITH) and Executive Director, ITC, welcomed the major move and said, "The news on GST rationalization comes as a big shot in the arm for the tourism industry. All ten member bodies of FAITH have worked tirelessly towards this endeavour and on behalf of FAITH, we would like to thank the government for making this happen. This adds great spurt and momentum to the Hospitality industry and creates a positive sentiment that ensures more vigour and strength to Destination India."

Reportedly, share prices of hotel companies recuperated to 4 to15 per cent intraday on Monday after the government slashed corporate tax and GST rates.

Around 240 representatives from 51 countries including Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, Indonesia, Malaysia, Mexico, New Zealand, Norway, Philippines, Poland, UK, USA and others will be showcased India's tourist destinations over the next couple of days in the tourism mart.

While being asked the minister also mentioned that from November 1, when Jammu and Kashmir formally will become Union Territory (UT), the region will have a "better season" than last year.