A big decision related to the hotel industry has been taken in the 56th GST Council meeting. Now hotel rooms with up to Rs 7,500 per day will be replaced by only 5% GST instead of 12% GST. That too without input tax credit (ITC).

This step will provide relief not only to the hotel owners but also to the passengers directly. Especially for people who come from middle class groups. The tourism sector contributes more than 5% to India’s GDP. With the reduction of GST, speed can be seen in this area.

Benefits for middle class and budget passengers
Nikhil Sharma, MD and CO (South Asia) of Radisson Hotel Group, said that this decision would make quality hospitality more economical for middle class passengers. He said that by reducing the burden of initial tax, the government has done a good job for the medium market and budget hotels. That is, now a middle class family or budget passenger will have to pay less tax than before in the hotel. This will directly affect the demand for domestic tourism and the number of passengers will increase.

Effect on hospitality industry
President of Federation of Hotel and Restaurant Association of India (FHRAI) K.K. Shyama Raju says that this improvement will make hotels more economical and attractive not only for domestic but also for international travelers. He informed that the hotel industry already contributes a big contribution to GDP and employment generation. This reduction in tax rate will increase the demand for tourism, promote the second expenses in hotel service and create more employment for youth and women.

The old demand for hotel industry and the path ahead
FHRAI and Hotel Association of India (HIA) had been demanding for a long time that 5% GST should be implemented with input tax credit (ITC) on all hospitality and tourism services. However, the GST Council has just implemented 5% without ITC. Despite this, Hotel Industries believes that this is a positive step, which will work to increase the competition of the hospitality sector. If 5% GST is applied with ITC in the coming time, then the global status of India’s hotel industry can be stronger.

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In the meeting of the GST Council to be held in early September, revolutionary changes can be seen as per PM Modi’s promise. Especially the common people are likely to get big benefits. The meeting will discuss the scheme of tax cuts on several products including cement, salon and beauty parlor as well as health insurance schemes.

In this meeting, it may be considered to bring all food and textile products into a slab of 5 percent, so that the tax system in the country can be made easier and all the classification concerns can be eliminated.

‘Proposal to reduce GST from 28 percent to 18 percent on cement’
The Times of India quoted sources as saying that GST on cement is proposed to be reduced from 28 percent to 18 percent. This will fulfill the long -standing demand for construction and infrastructure areas, as the construction material is a major raw material. This will help the common people to build a house.

GST Council meeting will be held on 3-4 September
The GST Council will meet on September 3 and 4 under the chairmanship of Union Finance Minister Nirmala Sitharaman, in which a change will be taken to change the slab of 40 percent on 5 percent and luxury items of 5 percent and luxury items for most items and services. Although states like West Bengal have suggested to increase the GST limit by 40 percent, but sources say that there will be a big amendment in the law for this.

How much tax will be paid on cars

The Modi government believes that 18 percent tax should be imposed on small cars up to 4 meters long and 40 percent tax will be levied on big cars, which is less than the current 50 percent (28 percent GST and 22 percent cess).

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The new GST (Goods and Services Tax) rates can be effective from September 22. The important meeting of the GST Council will be held in Delhi on 3 and 4 September, in which the suggestions proposed by the Finance Ministry will be discussed. It is believed that in this meeting, the proposal of major changes in tax slabs will be considered by Prime Minister Narendra Modi’s ramparts from the ramparts of the Red Fort.

On approval of the proposal, 2 slabs will be left in GST system
According to sources, the proposal to abolish two main GST slabs of 12 percent and 28 percent, especially in the meeting, can be discussed. If this proposal is approved, then only two slabs will be left in the Indian GST system, 5 percent and 18 percent. This change will make the tax system more simple.

40 percent tax can be imposed on tobacco-cigarette and other products
At the same time, 40 percent tax can be imposed on cigarette, tobacco and similar products instead of 28 percent tax currently applied. According to sources, the government has also sent its detailed recommendation to the GST Council for the new GST slab reorganization, on the basis of which a final decision will be taken in the upcoming meeting. The new GST rates can be announced only after this meeting. In addition to tobacco-cigarettes, cigars, other smoking products, alcohol and other alcoholic drinks are also imposed, which is determined by the state governments.

Consumers and businessmen will get big relief
Experts believe that this step will provide relief to the tax system as well as consumers and traders, as the GST Council meeting is considered very important, so only after this, complete information about the new rates and proposals will be revealed.

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GST couricil meeting: In the next meeting of GST Council, the government can give relief to the public on GST. According to media reports, the council can take a big decision on abolishing 12 percent tax slab. It is being told that this can be discussed on the meeting of GST Council.

This step can be taken to make GST rate structure easier. At present, there are four slabs of GST (5 percent, 12 percent, 18 percent and 28 percent) in the country. It is being considered to be reduced to three. According to the information given in the media report, this proposal has been supported from the advisory officers of Koji GST Council and now the council has to take a decision.

These things included in 12 percent tax slab

Currently, 12 percent tax slab includes many types of things such as condensed milk, fruit juice, 20 liters of drinking water bottles, walky-talki and contact lens etc. Apart from this, sausage, frozen vegetables, pasta and many types of household items also come in this category.

If it is decided to remove 12 percent tax slab in the meeting, then the items coming in it can be shifted to 5 percent or 18 percent slab. In such a situation, the prices of things like fruit juice, salty, spices, pencils, umbrellas can be reduced. At the same time, the price of things going to 18 percent slab such as carpet, detergent, contact lens, plastic items can increase.

Why 12 percent tax slab is being removed?

Many countries like Australia, UAE, Canada, Singapore have only one or two tax slabs. In such a situation, by adopting three tax slab structure instead of four in India, it can also reach close to global standard. Apart from this, officials and experts believe that the tax slab of 12 percent has now become irrelevant and so in view of the continuous increase in GST revenue, it is going on to reduce it from four to three. The next meeting of the GST Council is likely to be held in July. While the last meeting was held in December 2024.

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GST relief on insurance: The Insurance Regulatory and Development Authority of India (IRDAI) has spoken about reducing GST on health and life insurance premiums. The group of ministers (GOM) is expected to meet in April. According to the report of Moneycontrol, the council may consider the proposals in its next meeting to be held in May under the chairmanship of Bihar Deputy Chief Minister Samrat Chaudhary.

GOM meeting may be held in April

The official said, IRDAI has given its opinion on lowering GST on life and health insurance. Now IRDAI has also joined this discussion. The GOM meeting can be held on this in April. After this, the report will be submitted to the GST Council. The GST Council can give relief on GST on life and health insurance in its next meeting.

The meeting will be held in the late April or early May. Then perhaps this case of insurance will also be resolved. There was a consensus in the states to completely eliminate the 18 percent tax on the term insurance plan. Due to no comment from IRDAI, the decision was not being made on the decision.

Report expected to be finalized soon

The official said that IRDAI is also required to be included in this entire discussion so that it cannot be alleged that no talk was made to them. After reviewing the comments made by IRDAI, the Group of Ministers constituted under the chairmanship of Emperor Chaudhary will finalize its report. The GST Council had earlier deferred the decision to give exemption in GST on health and life insurance premiums or to reduce it till further information from the regulator in its meeting on 21 December.

These are included in GOM

The 13 -member ministers include Uttar Pradesh Finance Minister Suresh Kumar Khanna, West Bengal Finance Minister Chandima Bhattacharya and Kerala Finance Minister KN Balgopal. Other members include Rajasthan Health Minister Gajendra Singh, Karnataka Revenue Minister Krishna Bayere Gowda and Goa Chief Minister Pramod Sawant.

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