When GST was introduced in 2017, travel agents did not anticipate too many problems. Thankfully, that is still the case. When it comes to airline fares, there is not much tax difference between business and economy fares compared to pre-GST era, and hence, travels have said that the economy fares have come down marginally while business airfare has risen by two to three per cent.
Likewise, hotels serving budget and mid-market segments have not witnessed a steep incline, and travel agents are still able to offer incentives and discounts to travellers, just like they used to before the introduction of GST.
Travel agents are hailing impact of GST on travel. Some contend that the budget hotel sector has benefitted the most, considering that 80% of the hospitality market in India comprises budget hotels. While there was an issue when GST was announced and travel agents, especially operators, were unhappy with the unstructured rate classification, impact of GST on travel has been more or less favourable. However, when compared to neighbouring countries, like Singapore and Thailand, which has lower GST rates, the impact of GST on travel into the country has not been favourable. This is primarily as the GST rate in India for inbound travellers is not competitive and comes across as complex.
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