New Delhi/Jaipur: A joint report by EY India and Federation of Indian Chambers of Commerce & Industry has recommended reducing GST on premium hotel rooms to 9 per cent from the current 18 per cent, arguing that the move would improve India’s competitiveness as a global tourism destination.
The report was unveiled at the Great Indian Travel Bazaar 2026 held in Jaipur from April 26–28. It highlighted that high accommodation costs, transport expenses and taxes make India appear more expensive compared to competing destinations such as Thailand and Vietnam.
Titled “Reimagining Inbound Tourism in India: Trends, Technology & Transformational Opportunities – Towards Incredible India 4.0,” the study recommends retaining the existing 5 per cent GST slab for hotel tariffs between ₹1,000 and ₹7,500, while lowering the tax rate to 9 per cent for rooms priced above ₹7,500.
According to the report, the current 18 per cent GST on higher tariff categories adversely impacts price competitiveness, particularly for international travellers. A reduced tax rate, it said, would enhance affordability, improve value perception and align India’s hospitality pricing more closely with global competitors.
The study also calls for a strategic shift in India’s tourism approach—from a fragmented, destination-led model to a more integrated, experience-driven ecosystem—to unlock the sector’s full potential and attract higher inbound tourist flows.
