A Study on the Impact of Goods and Services Tax Reform on Hotels in Kerala
Keywords:
GST, VAT, Hotel Industry, Indirect Tax, reforms in taxationAbstract
Goods and Services Tax reform is one of the biggest reform in the history of independent India. It is a single tax on the supply of goods and services from the manufacturer to the consumer. The Indian Hotel Industry is one of the booming sectors in the economy and it contributes to around 6.23% of National GDP and 8.78 percent of the total employment in the country.
A month after the introduction of GST; Ganesh Shetty, President of Restaurants and Hoteliers Association, Pune, said that the businesses in hotels across India had come down by 20%. He further stated that the hotels were incurring high costs in terms of the up gradation of IT infrastructure, training of personnel and hiring of experts for compliance with the new system of GST. The consumers also complained about the increase in their restaurant bills and have stated that their bills are more than the earlier regime. In this context, a study is undertaken to identify the problems and prospects of the impact of GST Reform on Hotel Industry in Kerala. The study revealed that the hoteliers faced problems in transitioning to the new system, their compliance costs rose and there was a general increase in the price of goods and services. However, it is expected that in the long run GST will prove beneficial and make the dream of One Nation One Tax come true.
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