Impact on Tourism and Hospitality Industry Growth and Development: Post Implementation of GST in India

The GST came in force from 1st July 2017 in India. It is implemented on goods and services based upon ―destination principle‖ where actual consumption takes place. On the basis of current tax structure, there is a lot of scope for business person to overlapping or doubling the taxation at every step of sale or purchase of goods and services. This one unified tax rate GST helps to eliminate this fraud instead of charging different taxes at different steps. This industry was involved in three taxes as Service Tax, Luxury Tax and VAT which combined into one unified tax. Now, Indian Govt. is opting unified system of GST as Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST). Previously the VAT rate varied from state to state between 12 to 14.5 percent. When the VAT, service tax and luxury tax are compiled together then the total impact goes up and lies between 20 to 27 percent. This tourism and hospitality industry has highly influenced the economy, environment as well as society at national and international level. It has major contribution towards GDP and now after the implementation of GST, this industry has highly affected in its growth and development. By growth of this industry, their standards aregone high to meet the customers‘ expectations.

Due to the application of new tax structure GST in Indian economy on 1 July 2017 and makes many changes in tax slabs for purchase and sale of goods and services. The three tier tax rate structure has combined and makes a one unified tax for economic growth and development. This study will help to understand the gap between before and after implementation of GST in tourism and hospitality industry.

Kaur and Sharma (2012) described the importance of tourism in balance of payments, GDP and employment. This study presented the foreign tourists arrival in India grown rapidly which affected the growth and development of the nation. And found that 5 million annual foreign tourists and more than740 million domestic tourists visited in previous years.Dayananda K. C. (2014) described that nation contributes large proportion of national income and employment opportunities for tourism growth and development due to expansion and diversification of this sector. Kour et al. (2016) described various tax rates as 0%, 5%, 12%, 18% and 28% applied under GST. But only 0.25% rate is levied on rough precious and semi-precious stones items and 3% on gold. are 5%, 12%, 18% and 28% but on food grains, cereals and vegetables has levied zero tax rate under GST. Wahab (2017) explained in study that IT brought changes in travel and tourism scenario. It made travel easier and bridging gap between customer and seller by providing correct information on time at anyplace which boosted GDP and development of this sector.

• To study the growth and development by application of GST on Tourism and Hospitality industry.

With the assigning of GST rates on tourism, hotels and hospitality industry one major advantage is that it mitigates the multiple taxation system by subsuming all taxes into one single tax structure. It helps in growth and development of the nation by ease ofdoing business with new provisions of tax structure and flexible criteria.

As the table has shown the GST rates imposed on Hospitality industry. The GST rates on non-air- conditioned eatery has levied by 12 percent, air- conditioned eatery has imposed by 18 percent and eatery with liquor license has applied by 18 percent in any hotel at national level. As per the previous regime, a hotel with room tariffs more than Rs. 1000 was liable to pay 15 percent service tax but now by uniform GST people with room less than Rs.1000 then not liable to pay any service tax but at room tariffs Rs.1000 to Rs. 2500 liable to pay 12 percent, at room tariffs Rs. 2500 to Rs. 5000 liable to pay 18 percent and at room tariffs above Rs 5000 liable to pay 28 percent tax in anywhere in India. This new tax policy helps to the customers and businessman of this industry in making budgets. of goods and services are moved downward in tourism and hospitality domain. Now there is no VAT, Luxury and service tax imposed on the avail of services in this industry. Only one standardized tax GST has applicable with different rates 12 percent, 18 percent and 28 percent in India. Now the India is, ―One nation, one tax and one market‖.

Dayananda K. C. (2014). Tourism and Employment: Opportunities and Challenges in Karnataka- Special Reference to Kodagu District, Journal of Humanities and Social Science, 19 (11), pp. 01- 11. Kaur, M.and Sharma, N. (2012). Growth and Development of Indian Tourism Industry, Journal of Hospitality Application & Research, 7 (2), pp. 14- 24. Kour, M., Chaudhary, K., Singh, S., Kaur, B. (2016). A Study on Impact of GST After its Implementation, International Journal of Innovative Studies in Sociology and Humanities, 1 (2), pp. 17- 24. Leemput, E.V. & Wiencek, E. A. (2017). The Effect of the GST on Indian Growth, Retrieved from https://www.federalreserve.gov/econres/notes/ifdp-notes/the-effect-of-the-gst-on-indian-growth-20170324.pdf, as on October, 2017. Wahab N. I. (2017). Role of Information Technology in Tourism Industry: Impact and Growth, International Journal of Innovative Research in Computer and Communication Engineering, 5 (2), pp. 260- 263.

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Assistant Professor, Department of Management, Mangalmay Institute of Management and Technology, Greater Noida mani10988@gmail.com