The Federation of Hotel & Restaurant Associations of India (FHRAI) has urged Union Finance Minister and GST Council Chairperson Smt. Nirmala Sitharaman to rationalise GST in the tourism and hospitality sector, calling it vital for making Indian tourism globally competitive and positioning it as a key driver of economic growth under Vision 2047.
Welcoming the GST reforms announced by the Hon’ble Prime Minister on August 15, FHRAI said tourism contributes nearly 5% to India’s GDP and has the potential to double this share with supportive policies. The sector is also one of the country’s largest employers, generating extensive opportunities for youth and women, with a high multiplier effect on the economy.
However, FHRAI flagged India’s higher GST rates as a barrier to competitiveness, particularly against Asian peers such as Thailand, Indonesia, Vietnam, Sri Lanka, Singapore, and Malaysia, where tax structures range between 6–10%. To address this, FHRAI recommended a uniform 5% GST with input tax credit across hospitality and tourism services, delinking GST on food and beverages from room tariffs, and regularising past GST payments to avoid disputes arising from earlier ambiguities.
Mr. K. Syama Raju, President, FHRAI, stated, “Tourism is not just about travel—it is a national growth engine. Rationalising GST is essential for affordability, global competitiveness, and investor confidence. With the right policies, tourism can double its GDP contribution, create millions of jobs, and power India’s journey towards becoming a developed nation by 2047.”
FHRAI reaffirmed its commitment to partnering with the government to strengthen India’s economy, boost cultural diplomacy, and elevate the nation’s standing as a world-class tourism destination.