The lower tax rates announced by the GST Council on Friday can give a boost to tourism and hospitality sector ahead of the peak winter holiday season, industry experts said.

“We welcome the move as the industry was following up with the government on this for a while. Our voice has been heard finally. Now, those foreign and Indian tourists who were flocking to neighbouring countries can consider India as an option too,” said Gurbaxish Singh Kohli, Vice-President, Federation of Hotel and Restaurant Associations of India (FHRAI).

However, the 18 per cent GST is still high and it should have been reduced to around 12 per cent. But the latest announcements come as a breather, he added.

The room tariff beyond ₹7,500 per day will attract a GST of 18 per cent as against 28 per cent. While, the rooms with tariff between ₹1000 to ₹7,500 will attract a GST of 12 per cent. But there will be no GST on room tariff up to ₹1,000.

“ The GST rate rationalisation for hotels is an extremely positive development which augurs very well for the tourism industry. We are grateful to the Finance Minister for having considered this demand of the industry which is bound to create a good sentiment all across travel, trade and hotels,” said Dipak Haksar, Chairman CII National Committee on Tourism & Hospitality and Chief Executive, ITC Hotels.

The move will give a boost to the tourism and will bring job opportunities in the sector. The end users will get the benefit of this announcement, said Pronab Sarkar, President, Indian Association of Tour Operators. “We will reduce our rates and would request the hotels to make a cut in the prices,” Sarkar said.