GST of 28% to Hit Hotel Industry: EIH
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.