Shares of hotel companies rallied up to 16 per cent on the BSE in the early morning deals on Monday after the Goods and Services Tax (GST) Council approved proposal to cut tax rates on hotel tariffs.
Among the individual stocks, Indian Hotels rallied 10 per cent to Rs 163, while ITC surged 9 per cent to Rs 260 in the intra-day trade. Furthermore, Royal Orchid Hotels and Lemon Tree Hotels, too, soared 16 per cent and 13 per cent, respectively on the BSE.
The GST Council, after market hours on Friday, cut tax rate on hotel room tariffs, a move aimed at giving a boost to the hospitality sector. The GST rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut to 12 per cent from the existing 18 per cent. Similarly, the tax on room tariff of above Rs 7,500 has been slashed to 18 per cent from the existing 28 per cent. There will be no GST on room tariffs of below Rs 1,000 per night. READ MORE