The reduced GST rates on certain accommodations and transport vehicles and how it may benefit tourists in India.
GST reductions on hotel rooms costing up to ₹7,500/ per day, on buses or transport vehicles with seating capacity of over 10 Persons, and on art and cultural products - are expected to improve the affordability of travel and tourism to the middle class and budget travellers or tourists in India.
The new changes to the GST (Goods and Services Tax) have been implemented from yesterday, 22 September 2025. This recent GST reforms has reduced the tax slabs on many products and services, aimed at effectively reducing the cost for the consumers.
In case of products and services directly related to travel and tourism, the GST rates are reduced for the following:
- On Hotels (≤ ₹7,500/day) – GST reduced from 12% to 5% (without ITC)
- On Buses (with seating capacity of 10+ persons) – GST reduced from 28% to 18%
- On Art and Cultural Goods – GST reduced from 12% to 5%
With these newly reduced taxes, the Indian Government aims to make India’s tourism sector more affordable, by effectively enhancing the affordability of economical accommodation and public transport, and also to support artisans and cultural industries that make souvenirs or cultural products such as art and handicrafts.
GST is reduced from 12% to 5% on Hotels Rooms or accommodations which charge up to ₹7,500 INR per day or less. This lower GST slab for Hotels charging less than or equal to ₹7,500 INR per day per unit of accommodation, is expected to make such hotel stays more affordable for middle-class and budget travellers in India and make different forms of travel and tourism, such as, weekend travel, pilgrimage circuits, heritage tourism, eco-tourism, etc., more attractive to middle-class or budget travellers.
The lower taxes on this segment of accommodation is also expected to increase the number of mid-segment hotels, homestays, and guesthouses which offer stays within the ₹ 7,500 per day range. It also aligns India’s hospitality tax structure with international tourism destinations, and so it may benefit foreign tourists as well.
The 28% to 18% reduction in GST on transport vehicles or buses with over 10 seats, will reduce the upfront cost of such buses, minibuses, tempo travellers, etc., placing a lower burden on transport or tour providers. It is expected to increase the number of shared or public transport, and also expected to bring down ticket fares, especially in semi-urban and rural routes.
The GST Reduction From 12% to 5% on Art and Cultural Goods applies to statues, statuettes, original engravings, prints, lithographs, ornamental articles, stone art ware, and stone inlay work. This tax reduction on arts and sculptures aims to support artisans, craftsmen, and sculptors - many of whom are part of India’s traditional cottage industries.
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- Post on X by Ministry of Tourism @tourismgoi on X. Posted on 4:46 PM - Sep 22, 2025.
- Post on X by Ministry of Tourism @tourismgoi on X. Posted on 8:55 PM - Sep 20, 2025.