28% hotel tax band to be ... disbanded ?
 

I understand the 28% tax band on rooms with a base rate above INR7500 is to be reduced to18%, and the next band (1000-7500) will be 12%.

Can anyone confirm this, and when it might kick in?

It will go in to effect from October 1, 2019.

https://timesofindia.indiatimes.com/...w/71223934.cms

You will be entitled to the lower GST rate even if you book a non prepaid hotel reservation today for a stay on or after October 1, 2019.

just in time for me as well....i'm holding an event at a bonvoy property soon where i'm booking 70+ rooms for 2 nights each....this is going to save me a considerable amount....

Now now, thats not fair... the country operates on the fact that those who live in 'luxury' pay for GoI ;)

I'm expecting hotels to jack up their room rates since the hotels know what they were able to charge customers inclusive of the 28% tax. In other words, I expect much of this tax break to eventually be a tax break for hotels that mostly doesn't get passed onto hotel customers.

What a cynic!!

As though hotels would ever think of doing such a thing :D

keep in mind though that the hotel industry was hurting because of the 28% tax & often were forced to keep their room rates below inr 7.5k to fill up the rooms....

while they may be able to take some advantage of this situation, its shouldn't be as rampant as one might assume....

:D I consider myself a realist who expects profit-seeking hoteliers (corporate or individual) to seek to enhance their profits. That means not entirely foregoing an opportunity to take from the part of the (room cost) pie that the government is willing to give up to the profit-seeking hoteliers. :D

Some anecdotal information I have from November suggests that hotels have not, in fact, tried to jack up their rates to cover the "gap" left by the GST rates falling from 28% to 18%. Maybe some have done this, but at least it's not universal.

Many online / agency / corporate travel booking systems only show the base rate, so in practice many travelers are deciding on hotels based on the pre-tax rates. In such a situation the hotels don't have a big incentive to jack up the base rates as it'll create sticker shock at booking time. Just my two cents.

The Indian economy is struggling -- far more than the government and its highlighted economic indicators show -- and so the ability to jack up or even maintain prices has slipped with it. And over the longer-term, the story tends to be a bit different than in the shorter-term.