Archive · 28 Sep 2025
FHRAI Demands Tax Credit Restoration on Hotel Room Tariffs
The hotel industry in India, represented by FHRAI, wants a tax change.
They're asking to get back some money (Input Tax Credit or ITC) on the taxes they pay, particularly for rooms costing up to ₹7,500.
Previously, they could, but now they can't, which increases costs, especially for smaller hotels.
The FHRAI argues this hurts business and is seeking to fix this.
FHRAI is requesting Input Tax Credit restoration on room tariffs up to ₹7,500.
The GST on hotel tariffs up to ₹7,500 is 5%.
Input Tax Credit (ITC) is currently not available on those tariffs.
FHRAI says the change increases hotel costs.
FHRAI is seeking clarification to remove compliance ambiguities.
- Who
- Federation of Hotel & Restaurant Associations of India (FHRAI)
- What
- FHRAI is seeking restoration of Input Tax Credit on hotel room tariffs up to ₹7,500.
- When
- September 28, 2025
- Where
- India
- Why
- FHRAI believes the changes are adding costs and creating burdens, especially in smaller cities.
FHRAI View
Government View
GST impact on Hotels
FHRAI View
The new GST rates are increasing costs and creating structural burdens on hotels, particularly in tier-II and tier-III cities.
Government View
The government aims to rationalize tax rates to benefit consumers, improve compliance, and support growth.
ITC
FHRAI View
Withdrawal of ITC escalates costs.
Government View
The government has brought down the goods and services tax (GST) on such tariffs to 5 per cent from 12 per cent
- Organization
- Federation of Hotel & Restaurant Associations of India (FHRAI)
- President
- Surendra Kumar Jaiswal
- GST Rate for Hotels (< ₹7,500)
- 5%
- ITC Status
- Removed for tariffs up to ₹7,500
