NEW DELHI: Occupancies in hotels that charge Rs 7,500 or more a night have dropped in the first month after the country rolled out goods and services tax, according to online travel sites.But they have seen higher bookings for mid-range and budget properties.A levy of 28%, the highest rate under GST, is imposed on hotels with room tariff of Rs 7,500 or more. Those that charge less face GST at 12% or 18%.Online travel portals like Yatra.com, Cleartrip and Travkart said this apparently has affected the sentiment towards luxury accommodation in the market. While some hotels have reduced tariffs to escape the higher levy, industry executives said such a high rate of tax will hurt an industry which is a major earner of foreign exchange. “Due to increase in taxes, overall costing has been hiked and travellers are opting for international destinations like Thailand, Sri Lanka and Dubai as alternative options,“ said Manheer Singh Sethi, a cofounder of Travkart. According to research conducted by consulting firm HVS, the primary GST rate of 28% on hotels will make the star category hotels in Indian cities the most taxed in the world, surpassing those in New York, London and Paris excluding add on levies such as municipal tax and service charge.

Source: Economic Times August 15, 2017 07:07 UTC