Kolkata: Hospitality major EIH Ltd, which runs hotels under ‘Oberoi’ and ‘Trident’ brands, on Wednesday said the new 28 per cent Goods and Services Tax rate for hotels charging over Rs 7,500 in room tariff will have an adverse impact on the industry.
“The announcement that hotels charging over Rs 7,500 in room charges will attract 28 per cent GST will be detrimental to tourism and employment in the hospitality industry,” company’s Executive Chairman P.R.S. Oberoi told shareholders at the 67th Annual General Meeting here.
According to the company’s latest annual report, the application of the highest rate of 28 per cent to a significant part of the hospitality industry will make the destination more expensive and will adversely affect its capability to generate revenue and employment.
Responding to this, company’s Executive Vice President S.S. Mukherji said: “The effect of GST has increased taxation in the hands of customers, and somewhere it was between 19-20 per cent in various states. It has gone up to 28 per cent, and eight per cent extra expense is going to work negatively.”
He also said the new indirect tax regime has just started and its impact on the company’s business was to be seen.
The company will open The Oberoi, New Delhi, after renovation in January 2018. The estimated renovation cost was Rs 500 crore of which Rs 300 crore has already been invested.