GST Reforms to Transform Indian Hospitality into Globally Competitive Force: HAI

The Hotel Association of India (HAI) has lauded the government’s latest GST reforms as a game-changing step toward transforming India into a globally competitive hospitality destination. Recent changes—streamlining tax slabs, enabling more seamless input credit mechanisms, and clarifying rules for bundled services—are expected to lower compliance costs, boost investment, and unlock new tourist and business travel flows.

Previously, the industry faced multiple rates and restrictive input tax credit rules, adding complexity and raising both operational expenses and pricing uncertainty. Under the revised GST regime, a single rate for mid-to-high segment room tariffs, simplified tax for bundled food/accommodation packages, and broader credit eligibility have levelled the playing field. Hotel operators are now able to more efficiently offset tax paid on capital goods, renovation, and input services, freeing up capital for expansion and service upgrades.

HAI President KB Kachru notes that these reforms align Indian practice with international standards, fostering an environment where hotels, resorts, and hospitality chains can scale up amenities, talent, and brand experiences to win a share of global events, MICE tourism, and high-value independent travellers.

Industry analysts anticipate greater formalisation—drawing small independent guesthouses and local homestays into the tax net, raising quality benchmarks and expanding access to government incentives and digital marketing programmes.

The GST reforms are projected to make India’s hospitality sector more resilient and adaptable to external shocks, supporting faster recovery from pandemics, economic cycles, or global travel disruptions.