The Managing Director/CEO/Director/Partner/General Manager
All FHRAI Members
CC: All Members of the Executive Committee
All Regional Associations
President FHRAI
Sub: Request for Member Inputs on GST Rationalization Proposals for Hospitality Industry
Dear Member,
This is with reference to FHRAI’s recent discussions with the Ministry of Finance. We are pleased to inform you that the Ministry has taken cognizance of FHRAI’s request for GST rationalisation for the hospitality industry. This includes a proposal for lower GST on hospitality-related activities and delinking of GST on Food & Beverage (F&B) services in restaurants within hotel establishments from the room tariff charged for accommodation.
In this regard, the Ministry has sought inputs on the following proposals:
- Flat GST on F&B Services
If the Ministry considers introducing a flat 5% GST (without ITC benefits) on all F&B services in restaurants within hotels irrespective of room tariff, will hotels currently charging 18% GST (with ITC benefits) on F&B services be agreeable to this change.
We would like to know your valued opinion on this.
2. Cap on Rooms that can be priced above ₹7,500 for hotels having tariffs below the current ₹7,500 threshold
While deciding to delink GST on F&B from room tariff, the Government may also consider to put a cap on the maximum number of rooms that can be priced above ₹7,500 within a given period by hotels having tariffs below the current ₹7,500 threshold. The Government may consider this as an additional revenue earner to the exchequer.
Considering the peak season duration of 3–4 months in a year, FHRAI’s assessment is that any cap below 25% may not be viable for hotels. Members are requested to share your inputs on the same.
The GST Council is expected to meet in the first week of September 2025 and FHRAI may be required to present the consolidated views of its members before the meeting. We therefore request you to kindly share your inputs/ viewpoints on the above proposals latest by 28th August 2025 to eatosg@fhrai.com.
Your timely feedback will be crucial in ensuring that the industry’s perspective is effectively represented before the Ministry.
We look forward to hearing from you at the earliest.
With best regards,
Jaison Chacko
Secretary General
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The Federation of Hotel & Restaurant Associations of India
Regd. Off. : B-82, 8th Floor, Himalaya House, 23, K G Marg, New Delhi - 110 001
Tel.: 011-40780780, Email: fhrai@fhrai.com, Web.: www.fhrai.com