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Planning A Dream Vacay? Here’s How GST Will Affect Travel Costs!

Planning A Dream Vacay? Here’s How GST Will Affect Travel Costs!

With the arrival of Goods and Service Tax (GST) in India, it’s all anyone can talk about - from carefully examining our restaurant bills to breaking the ice with your fellow commuters on the local trains. With transportation and hotel bookings being a necessity in the travel planning process, explorers and wanderers alike want to know the impact of GST on travel budgets. Allow us to help you with your itinerary as we take you through a traveller’s guide to the system. Here’s everything you need to know about GST when it comes to planning that much-needed vacay!


1. Air Travel


1 Goods and Service Tax - suitcases


The yay: Air fare has been placed under the 5 percent tax bracket (the smallest of the four) and this makes your economy class tickets cheaper than they were before.

The nay: Fares for the business class passengers are likely to get more expensive as it has been placed in the 12 percent tax bracket, but it should be a marginal increase, compared to the usual fare of the ticket.


2. Taking the roads


The yay: While car rental services will be levying an 18 percent charge, Olas and Ubers will be considered in the 5 percent tax bracket (coming down from the pegged 6 per cent).


The nay: Buying your own vehicle will be more expensive as all personal vehicles will be placed in the highest tax bracket. Save and invest in that road trip!


3. Eating Out Across India


3 Goods and Service Tax - dining table


While AC restaurants face an 18 per cent tax, pocket-friendly, non-AC restaurants will face a 12 percent tax. Both ways, there is an increase from the current rates, and we advise the hungry travellers to save or splurge on their meals accordingly.


4. Tour And Travel Packages


The prices for international tour packages are still unclear, but overlapping and double taxation on hotel and flight bookings that have already been taxed still persists. The 5 percent tax is standard for all tours, but services extended to Indians abroad is a concern for tour operators. Be prepared and enquire about the price of your respective packages well in advance.


5. Boarding and lodging


5 Goods and Service Tax - bedroom



The yay: Campers rejoice, as hotels that charge below INR 1,000 per night will be exempted from GST while those under INR 2,000 will come under the 12 percent tax bracket.

The nay: Additionally, those hotels charging INR 2,500 to INR 5,000 will be levying an 18% tax and those above INR 5,000 will have to pay a whopping 28 percent GST.


Research and adequate travel information from family, friends, agencies, and vendors should help you stay true to your travel budget and plan that perfect vacation.


Internal images: Shutterstock

Published on Jul 13, 2017
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