GST Cuts Make Travel and Dining Cheaper: Big Boost for Domestic Tourism This Festive Season

In a major relief for travelers and diners, the government has revised Goods and Services Tax (GST) rates across key sectors, aiming to make mid-range travel and restaurant experiences more affordable — just in time for the festive season.

Reduced GST on Mid-Range Hotel Stays

Travelers booking hotel rooms priced between ₹1,001 and ₹7,500 per night will now pay only 5% GST, down from the earlier 12%. For instance, a room costing ₹4,500 will now carry just ₹225 in GST instead of ₹540 — a saving of over 50% on the tax component alone.

• Hotels under ₹1,000/night remain tax-free.
• Luxury hotels above ₹7,500/night continue to attract 18% GST.

This move is expected to significantly boost domestic tourism, especially during high-demand periods like Navratri, Dussehra, and Diwali.

Lower GST on Economy Flight Tickets

For those flying economy class, the GST has been slashed from 12% to 5%, making air travel more affordable. A round-trip flight between Pune and Delhi, for example, will now cost less if booked under the new rate.

However, business class, premium economy, and first-class tickets will now attract 18% GST, up from the previous 12%.

Important: The revised GST rates are applicable only on bookings made on or after 22 September. Tickets booked before this date will follow the old tax rates, even if the travel date is later.

Restaurants Get GST Relief Too

Dining out is now easier on the wallet. Most restaurants will charge only 5% GST, down from the earlier 12% or 18%, depending on the establishment.

This change brings relief for families planning festive outings and for wedding planners, event managers, and caterers, who can now offer more competitive packages with reduced food service taxes.

Higher Taxes for Luxury Travel and Services

While the middle class benefits from these GST cuts, the luxury travel segment will see a tax hike:

• Private jets, yachts, and helicopters will now face a steep 40% GST, up from the previous 28% plus 3% cess.
• Premium air travel (business and first-class) also now falls under the higher 18% tax slab.

The rationale? The government believes those opting for luxury should bear a greater share of the tax burden.

Positive Impact on Tourism and Hospitality

According to economists, the revised GST structure is aimed at reviving India’s services sector, particularly tourism, aviation, and hospitality, which were among the hardest-hit during the COVID-19 pandemic.

With cheaper hotels, lower-cost flights, and reduced restaurant bills, experts anticipate a surge in domestic travel and spending during the festive season.

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Disclaimer: This article is for informational purposes only. GST rates and prices may vary depending on travel dates, hotel classifications, airline policies, and other booking terms. Travelers are advised to verify the latest rates and terms before making any payments.