India’s latest GST reforms are reshaping the travel landscape

India’s latest GST reforms are reshaping the travel landscape in a big way—especially for budget-conscious travelers and domestic tourism. Here's how the changes are playing out:

Hotel Stays: More Affordable
- Rooms priced up to ₹7,500/night now attract just 5% GST, down from 12%.
- This means families and solo travelers can save hundreds per night, making longer or more frequent trips more feasible.

Air Travel: Cheaper Flights
- Economy class tickets now carry 5% GST, reduced from 12%.
- Business class fares increased to 18% from 12%, making premium travel slightly more higher.
- These cuts are expected to boost domestic flight bookings, especially during festive seasons.

Travel Agents & Tour Operators: Mixed Bag
- Services offered to foreign clients now qualify as exports, unlocking zero-rated GST benefits like input tax refunds.
- However, loss of Input Tax Credit (ITC) on hotel bookings may squeeze margins for travel agents.

Broader Economic Ripple
- The reforms are expected to stimulate demand, especially in Tier-II and Tier-III cities, encouraging exploration of lesser-known destinations.
- Hospitality players are already expanding in places like Rishikesh, Goa, and Udaipur to tap into this surge.

Industry Concerns
- While travelers benefit, hoteliers worry about the removal of ITC, which could raise operational costs and slow investment.

In short, the GST overhaul is a win for travelers and domestic tourism, but it’s a balancing act for businesses navigating the new tax terrain. If you’re planning a trip soon, this might be the perfect time to explore more for less.