If you are a traveller on a shoestring budget, Modi government’s move to reduce tax rates on budget accommodation might bring some joy to you.
Hotels in India offering room tariffs below Rs 1,000 per night have now been exempted from tax. Those hotels with room rentals between Rs 1000-2500 will be taxed at 12 percent, much lower than what they charged their customers earlier.
“It is great news. It will reduce the cost of rooms for our customers,” said Sidharth Gupta, co-founder at Treebo adding that 75-80 percent of Treebo’s accommodation inventory falls in the sub Rs 2500 rentals range.
According to him, the aggregate tax in a Treebo room could typically fall in the range of 15-20 percent earlier.
Ritesh Agarwal, founder and CEO of India’s largest budget hotel aggregator chain Oyo Rooms says that a lower tax rate for budget hotels sector will ensure that the industry’s quality upgrade continues while delivering standardised accommodation to middle-class travellers.