In the recently concluded meet on GST, the government has declared a four tier structure of 5, 12, 18 and 28 per cent of which the service sector will be taxed at 18 per cent.
"It is estimated that the lower GST rate of 5 per cent will contribute to a decrease in our Current Account Deficit, increase in the GDP, doubling up of both foreign and domestic travel and also doubling up of tourism induced employment, across each state and nationally," HRAWI President Dilip Datwani said.
According to estimates, a GST rate of 5 per cent will more than double both foreign travel coming to India to 20 million tourists and domestic travel within India to 2.5 billion.
"We welcome the 5 per cent tax slab on food, which is a positive outcome of subsumed taxes for hotels and restaurants. However, the 18 per cent levy on services or room revenue in our case, compared to our neighbouring countries which charge a Tourism tax between 4 to 7 per cent, rules out fair competition," HRAWI former President Kamlesh Barot said.
"A foreign tourist planning a trip across Asia may entirely skip India or spend fewer days in our country on account of these perceived high room rates because we also don't refund taxes to foreigners like many countries do," added Barot.
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