India’s hospitality sector has undergone a major tax restructuring with the government’s decision to reduce GST on hotel rooms priced up to ₹7,500 to just 5%. This bold move is part of the broader GST rationalization intended to stimulate domestic tourism, make hotel stays more affordable, and bring greater clarity to the tax framework.

Before this reform, hotel rooms within the same tariff range attracted 12% GST with Input Tax Credit (ITC). Under the new structure, these rooms now fall under the 5% GST slab without ITC, making hotel stays cheaper for guests while altering cost structures for hoteliers.

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