In the process of recovery from the deep recession of the Covid pandemic, Goa’s hospitality industry on Wednesday demanded a 12% GST exemption for small hotels charging less than Rs 1,000 for a room, saying the imposition to small hospitality units would have a negative impact on business.
The Goa Travel and Tourism Association, the oldest tourism industry group in the state, has also submitted its GST reduction request to Industry Minister Mauvin Godinho, who is also the state government representative on the Goods and Services Tax Council.
“Since July 18 this year, a GST rate of 12% has been levied on hotels with a rate below Rs. 1000 per night. Prior to that, there was no GST applicable on this slab,” indicates the memorandum submitted to the Minister of Goa.
The memorandum also says about 60% of the state’s registered small hotels, 3,848, would be affected by the board’s decision to their detriment.
“About 2,170 out of a total of 3,848 hotels in Goa, registered with the Ministry of Tourism are small hotels with a rate of less than Rs 1,000 per night. This will negatively affect them and increase their compliance costs,” the memorandum states.
“The Goa Travel and Tourism Association has requested Mauvin Godinho, Minister of Industry and Transport and Goa’s representative on the GST Board to take up this issue and come up with the solutions mentioned below “, TTAG said in a statement.
Another demand in the association’s memorandum includes decoupling the GST on hotel-based restaurants from room rates.
“Hotels should have the option of choosing a 5% GST rate on restaurant services,” the memorandum also states.
The tourism industry in the state is recovering from the Covid-19 crisis.
Goa is considered one of the best beach and nightlife tourist destinations in the country. Before the pandemic, nearly eight million tourists visited the state each year.