Starting April, dining at restaurants within hotels charging more than ₹7,500 per night will become costlier, as the Goods and Services Tax (GST) rate on these services will increase to 18%. This move aligns restaurant services in luxury hotels with the same tax structure applicable to standalone fine-dining establishments.
Previously, hotel restaurants enjoyed a lower GST rate of 5% when providing services to guests staying at the property. With the revised taxation, food and beverage services within high-end hotels will now attract a uniform 18% GST, irrespective of whether the customer is a hotel guest or a walk-in diner.
The decision is expected to impact both hoteliers and consumers, particularly in luxury hospitality markets. While hoteliers may need to adjust pricing strategies, guests dining at premium establishments may see a rise in their overall expenses. Industry experts anticipate a potential shift in consumer preferences, with some diners opting for standalone restaurants to avoid the higher tax burden.
Despite the price adjustment, luxury hotel dining remains a sought-after experience, offering world-class cuisine, ambiance, and service. Hoteliers are likely to introduce value-driven promotions to maintain guest engagement while adapting to the new tax structure.
