GST Revamp & Travel: What India’s Hotels Need to Know
                     G S T  2 . 0  R E F O R M S
How the New GST Slab Revamp Is Changing
the Game for Hotels, Flights & Travel in India
What changed on 22 September 2025 — and how travelers, hotels, and airlines can make the most of it
Industry Briefing  •  Prepared by Holy Hotels  •  2026
Table of Contents
What this briefing covers
01 Introduction 08 Tips & Tricks to Save More
02 Overview of the GST Revamp 09 Real-Life Example
03 Key Benefits for Travelers 10 Frequently Asked Questions
04 Important Rate Changes 11 Key Takeaways
05 Step-by-Step: What Changed & When 12 About Holy Hotels
06 Best Practices 13 Contact & Resources
07 Common Mistakes to Avoid
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Introduction
• On 22 September 2025, India’s GST Council rolled out its biggest slab 
rationalization since GST began in 2017
• Popularly termed “GST 2.0”, the reform directly touches hotel tariffs, 
flight classes, dining, and tourism activities
• The stated aim: boost discretionary income and fuel consumption across 
travel and hospitality
• This briefing breaks down exactly what changed, who benefits, and how 
to plan around it 22 SEP
2025 — REFORM TAKES EFFECT
Marketed nationally as the “GST Bachat Utsav,” the new 
rates apply from this date across hotels, flights, 
restaurants, and tourism services.
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Overview: What Actually Changed
Three pillars of travel spending are directly reshaped by the new GST structure
Hotels Flights Dining & Experiences
Budget rooms under ₹1,000 are now GST- Economy class holds steady at 5% GST, while Standalone restaurants move to a uniform 5% 
free; mid-range rooms (₹1,001–₹7,500) drop business, premium, and first class rise from GST; theme parks and guided tours also see 
from 12% to 5% 12% to 18% relief
Net effect: budget and mid-range travel gets cheaper, while premium and luxury segments absorb a modest increase.
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Key Benefits for Travelers
Cheaper Budget & Mid-Range Stays Rooms priced ₹1,001–₹7,500 see GST cut from 12% to 5%
No New Burden for Economy Flyers Economy-class airfares remain taxed at a steady 5%
More Affordable Dining Out Standalone restaurants now charge a uniform 5% GST, down from up to 18%
Lower-Cost Experiences Theme parks, guided tours, and adventure activities see reduced GST
A Boost for Domestic Tourism Lower effective costs are expected to lift demand across mid-tier destinations
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Important Rate Changes: Old vs New
CATEGORY OLD RATE NEW RATE
Hotel rooms under ₹1,000/night 12% 0%
Hotel rooms ₹1,001–₹7,500/night 12% 5%
Hotel rooms above ₹7,500/night 18% 18%
Economy class flights 5% 5%
Business / premium / first class 12% 18%
Standalone restaurants Up to 18% 5%
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Step-by-Step: What Changed & When
1 2 3 4 5
Council Approval Rates Go Live Systems Updated “Bachat Utsav” Push Demand Monitored
GST Council finalizes the rationalized New rates apply nationwide from 22 Hotels and airlines revise pricing, Government campaign promotes the Industry tracks booking trends and 
slab structure September 2025 billing & invoicing savings to consumers adjusts strategy
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Best Practices
Compare the all-in, tax-inclusive cost — not just the base fare or rate Choose economy class where possible; premium fares now cost more
Book mid-range hotels (₹1,001–₹7,500) to capture the biggest rate cut Hotels: factor in the loss of input tax credit on the 5% slab
Watch the ₹7,500 threshold — crossing it triggers the 18% luxury slab Track invoices closely to confirm the correct new rate is applied
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Common Mistakes to Avoid
Assuming all travel costs dropped — premium flights and Ignoring the ₹7,500 threshold and unknowingly booking into 
luxury hotels got more expensive the 18% slab
Comparing only base fares instead of the final tax-inclusive Hotels overlooking the loss of input tax credit on the new 5% 
price slab
Delaying invoicing or POS software updates past the 22 
September effective date
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Tips & Tricks to Save More
Use rate-comparison tools to spot the true post- Bundle stays with standalone-restaurant dining Book direct with property owners — platforms 
GST savings for compounded savings like Holy Hotels charge zero commission on top of GST
Follow official GST Council notifications for Plan trips just under the ₹7,500/night and Keep digital copies of invoices to verify the correct 
category-specific updates business-class thresholds rate was charged
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Real-Life Example: A Weekend Trip
Illustrative calculation for a 2-night mid-range trip, before and after GST 2.0
Hotel (₹5,000/night × 2) Economy Flight (round trip) Dinner at Restaurant
Before: ₹11,200   →   After: ₹10,500 Before: ₹6,300   →   After: ₹6,300 Before: ₹2,360   →   After: ₹2,100
₹700 saved No change ₹260 saved
Total trip savings: approximately ₹960 — about 5% off the pre-reform cost
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Frequently Asked Questions
Q: Do the new rates apply to all hotels? Q: Will my flight ticket get cheaper?
A: No — the applicable rate depends on the room tariff slab; rooms under A: Only if you fly economy — premium, business, and first class now attract 18% 
₹1,000 are GST-free. GST, up from 12%.
Q: What about international flights? Q: Can hotels still claim input tax credit?
A: GST applies only to specific India-collected fees; outbound international fares A: Hotels in the 5% slab (₹1,001–₹7,500) cannot claim ITC, which may affect 
are minimally affected. their other charges.
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Key Takeaways
GST 2.0, effective 22 September 2025, is the biggest slab rationalization since GST began in 2017
Budget and mid-range hotel stays and standalone dining get meaningfully cheaper
Economy flyers see no change, but premium and business class travelers now pay more
Always compare all-in, tax-inclusive costs — not just base prices
Hotels must factor in the loss of ITC on the new 5% slab when setting prices
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About Holy Hotels
• An India-based hotel and homestay booking platform connecting 
guests directly with property owners W H Y  H O LY  H O T E L S ?
• Zero commission, no broker in between — direct bookings only
• Direct bookings with property ownersServing spiritual pilgrims, business travelers, and families alike
• Active across Uttarakhand, Himachal Pradesh, Uttar Pradesh, 
Maharashtra, and Kolkata
No extra charges or commissions
Easy and secure platform
Listings for all kinds of travel needs
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Get in Touch
Ready to book smarter — or list your property commission-free?
WEBSITE EMAIL PHONE ADDRESS
holyhotels.in [email protected] +91 8448265533 E53 A Mansarover Garden,New Delhi-110015, India
Holy Hotels — Direct. Transparent. Commission-Free.
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