Industry stakeholders said the move is in line with the government’s stated objective of turning India into a tourist hub. Prime Minister Narendra Modi, in his latest Independence Day speech, had urged people to visit tourism destinations in India, rather than travelling abroad.
“This adds great spurt and momentum to the hospitality industry,” said Nakul Anand, chairman of industry body Federation of Associations in Indian Tourism & Hospitality, and executive director of ITC.
Bad news for cola makers
Friday’s decision brought some bad news for the makers of aerated drinks like Coca-Cola and PepsiCo India. The GST
rate on caffeinated drinks has been hiked — from 18 per cent to 28 per cent — to bring it on a par with the rate on sugary aerated drinks. Moreover, a 12 per cent compensation cess has been levied on them, which will effectively take the tax rate to 31.36 per cent.
Because of this, products like Thums Up Charge and Red Bull will now attract significantly higher GST. While companies are yet to respond, industry sources said their prices may go up.