GST of 28% to Hit Ho­tel In­dus­try: EIH

The Economic Times - - Finance & Commodities - Our Bu­reau

Kolkata: EIH, which runs the chain of ho­tels un­der the Oberoi brand, said the goods and ser­vices tax (GST) of 28% im­posed on ho­tels with room tar­iff of more than ₹ 7,500 will have an ad­verse im­pact on the in­dus­try.

Such a rate of tax “will be detri­men­tal to tourism and em­ploy­ment in the hos­pi­tal­ity in­dus­try”, ex­ec­u­tive chair­man PRS Oberoi told share­hold­ers at the com­pany’s 67th AGM held in Kolkata.

Ac­cord­ing to the com­pany’s lat­est an­nual re­port, the ap­pli­ca­tion of the high­est GST rate on a sig­nif­i­cant part of the hos­pi­tal­ity in­dus­try will make the des­ti­na­tion more ex­pen­sive and ad­versely af­fect its ca­pa­bil­ity to gen­er­ate rev­enue and em­ploy­ment. Ex­ec­u­tive vicechair­man SS Mukherji said: “The ef­fect of GST has in­creased tax­a­tion in the hands of cus­tomers. Ear­lier, the tax rates were around 19-20%.” This ex­tra ex­pense will work neg­a­tively, he said, but adding that its im­pact on the com­pany’s business was yet to be seen.

Mean­while, the com­pany plans to re­open its un­der-ren­o­va­tion flag­ship ho­tel, The Oberoi New Delhi, three months ahead of sched­ule, by Jan­uary 2018.

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