The GST Council is considering allowing Input Tax Credit (ITC) on hotel accommodation priced up to ₹7,500 per night, potentially reversing the current 5% GST-without-ITC structure. The proposal, expected to be discussed at the Council’s October 8 meeting, could also cover ancillary hotel services such as restaurants, spas, gyms and salons. The current regime, introduced in September 2025, reduced GST on rooms up to ₹7,500 from 12% with ITC to 5% without ITC, requiring hotels to reverse proportionate credit on common inputs. For the travel trade, restoring ITC could lower embedded tax costs for hotels and improve pricing efficiency for tour operators, corporate travel and package holidays, particularly in the budget and mid-scale segment.
Shreya Bansal is a reporter at TravTalk India, covering the travel and tourism industry. She brings a keen eye for emerging trends, trade developments, and the stories shaping the travel landscape. Through in-depth reporting and on-ground insights, she connects industry stakeholders with news that matters. Beyond travel, Shreya has a growing interest in the premium lifestyle space, particularly the world of fine jewellery and is eager to explore the craftsmanship, culture, and commerce that define luxury living.