Bengaluru: The Karnataka State Hotels Association (KSHA) has welcomed the recent Goods and Services Tax (GST) reforms announced by the GST Council, calling them a long-awaited relief for the hospitality industry. The association, however, has urged the government to further reduce the 18 per cent GST levied on rent for hotels and restaurants operating in rented premises.
KSHA applauds GST Council reforms
In a formal statement, KSHA President G.K. Shetty said the revised framework addresses long-standing demands of the hotel and tourism industries. He described the reforms as a catalyst for growth that would benefit both operators and travellers.
The changes include reducing GST on several goods used by hotels, such as diabetic foods, mushrooms, ice cream, chocolates, bread, parotta, vegetables, fruits, and grain-based products. Additionally, the GST on hotel rooms priced up to ₹7,500 has been lowered from 12 per cent to 5 per cent.
“These reforms effectively address persistent requests from the industry. On behalf of KSHA and in my personal capacity, I extend our sincere congratulations to the GST Council, Hon’ble Prime Minister Shri Narendra Modi, and Hon’ble Finance Minister Smt. Nirmala Sitharaman for this landmark decision,” Shetty said.
Boost for tourism and hospitality
Shetty noted that the GST cuts would directly benefit customers and stimulate demand. “These adjustments are anticipated to act as a catalyst for growth within both the hotel and tourism sectors,” he remarked, adding that the reforms were the outcome of sustained advocacy by the association.
Industry experts expect that the reduced tax burden on food items and hotel tariffs will encourage higher domestic travel and greater spending in the hospitality sector, especially during the festive season.
Demand for rental tax relief
Even as it welcomed the reforms, KSHA flagged one key concern — the 18 per cent GST charged on rent for hotels and restaurants operating in leased buildings. Shetty said this levy continues to burden a large share of small and mid-sized players in the industry.
“A critical issue that persists is the 18 per cent GST currently levied on rent for hotels and restaurants operating in rented buildings. We respectfully implore the Central Government and the GST Council to consider a reduction in this rate as well,” he said.
The association believes that lowering this rate would encourage further investments and expansion, helping more operators sustain their businesses amid rising costs.
Conclusion
The KSHA’s strong endorsement of the GST cuts reflects the industry’s optimism about renewed growth in the hospitality and tourism sectors. However, its demand for a reduction in rental tax underscores the challenges that continue to affect smaller players in the ecosystem. The government’s response to this request could determine whether the benefits of the reforms are truly widespread across the industry.