**How GST 2.0 Reforms Can Boost Tourism in India**
*By Dwaipayan Roy | Sep 22, 2025, 05:21 PM*
The Indian government’s recent Goods and Services Tax (GST) reforms are set to give a significant boost to the hospitality, transport, and cultural sectors, according to the Ministry of Social Welfare. These reforms include reduced taxes on hotel stays and bus fares, aimed at making tourism more affordable and attractive.
### Making Tourism More Affordable
The Ministry of Social Welfare announced that the lowered GST rates form part of a strategic plan to encourage investment in tourism-related sectors and generate more employment opportunities. By making travel and accommodation cheaper, the government hopes to strengthen the domestic tourism ecosystem and promote India’s rich cultural heritage.
### Positive Impact on Tourism Growth
The government is optimistic about a surge in tourism growth following these changes. Between 2021 and 2024, Foreign Tourist Arrivals (FTAs) in India soared from 15.27 lakh to 99.52 lakh, signaling a robust post-pandemic recovery in the tourism industry, according to Ministry of Tourism data.
### GST Cuts on Hotel Stays
One of the key reforms is the reduction of GST on hotel rooms priced under ₹7,500 per day — the rate has been cut from 12% (with input tax credit) to 5% (without input tax credit). This move is expected to make hotel accommodations more affordable for middle-class and budget travelers. Additionally, aligning India’s hospitality tax rates with those of other countries aims to attract more foreign tourists.
### Boosting Sectoral Growth
These tax reductions are anticipated to spur growth in weekend travel, pilgrimage circuits, heritage tourism, and eco-tourism. The reforms encourage investment in mid-segment hotels, homestays, and guesthouses, which will not only create jobs but also enhance infrastructure across these sectors.
### GST Cuts on Transport
The government has also lowered the GST on buses with seating capacity greater than 10 from 28% to 18%. This reduction is likely to decrease ticket prices, especially in semi-urban and rural areas, making public transport a more viable option. This initiative encourages people to shift from private vehicles to shared or public transport, which can help reduce congestion and pollution levels.
—
In summary, the GST 2.0 reforms offer a promising roadmap to revitalizing India’s tourism industry by making travel and accommodation more affordable, attracting investment, and supporting sustainable growth across related sectors.
https://www.newsbytesapp.com/news/business/gst-reforms-to-boost-hospitality-transport-cultural-sectors-government/story
