July, 19, 2017
NEW DELHI: A nine-day business conference to be held in September in Kochi, Kerala, has just moved to Sri Lanka, with the organisers coming around to the view that footing the goods & services tax (GST) rate of 28% for the event is way too much than paying taxes in hotels in the neighbouring country.
“With most hotels being close to the national highways in Kerala, business was already hit with the Supreme Court ruling on liqour ban. GST has made the MICE business a national issue and has made matters worse. Why have they complicated matters with multiple slabs? The concept of GST globally is one tax, one slab,” said Jose Pradeep, treasurer of the Kerala Travel Mart Society.
Hotels across the country have started getting cancellation requests, and hosting MICE (meetings, incentives, conferences and exhibitions) events have become an expensive affair since the GST rates kicked in on July 1.
Hoteliers said that with the 28% tax slab, high-end Indian hotels have become steeper than countries such as Thailand and Sri Lanka, leading to bookings being renegotiated or even moving to other countries. Bookings for MICE events happen at least 6-8 months and at times even one or two years in advance in a bid to get lower rates.
Elsewhere, at Le meridian in Lutyens' Delhi, calls and concerns are pouring in for MICE events. “People are expressing concerns and expecting us to renegotiate our base rates. We are evaluating these events on a case-to-case basis as some of these events are planned in advance and cannot keralbe moved at the last minute.” said Tarun Thakral, chief operating officer at Le Meridian Delhi.
Garish Oberoi, VP, Federation of Hotel and Restaurant Associations of India, said hotels, especially in places like Delhi, Kerala and Agra which boast of large convention centres for corporate events are losing business to other countries.
Oberoi said the association has tried reasoning with the government that the tax slabs cannot be on the published tariffs, but on the invoice value which could change with season.
Subramanya Sharma, chief marketing officer and head of products at travel portal Cleartrip, said hotels priced above Rs 7500 are seeing a much slower growth in bookings on the portal than the hotels priced below. “The length of the stay in these hotels has also decreased slightly,” he said.
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