**How GST 2.0 Reforms Can Boost Tourism in India**
*By Dwaipayan Roy | Sep 22, 2025, 05:21 PM*
The Indian government’s recent Goods and Services Tax (GST) reforms are set to give a significant boost to the hospitality, transport, and cultural sectors. In a strategic move announced by the Ministry of Social Welfare, reduced taxes on hotel stays and bus fares aim to make tourism more affordable and accessible across the country. This initiative is designed to encourage investment, generate employment, and strengthen the overall tourism ecosystem in India.
**Government Optimistic About Tourism Growth**
The government is confident that these tax cuts will not only promote domestic tourism but also help preserve India’s rich cultural heritage. Additionally, the reforms are expected to stimulate investment in related sectors, further accelerating growth. According to the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in India soared from 15.27 lakh in 2021 to 99.52 lakh in 2024, reflecting a robust post-pandemic recovery and expanding tourism market.
**Affordable Hotel Stays for Budget Travelers**
A key highlight of the reform is the reduction of the GST rate on hotel rooms priced below ₹7,500 per day—from 12% (with input tax credit) down to 5% (without input tax credit). This significant cut is expected to make hotel accommodations much more affordable for middle-class and budget-conscious travelers. Furthermore, aligning India’s hospitality tax rates with global standards will likely make the country a more competitive and attractive destination for international tourists.
**Boosting Sectoral Growth and Employment**
The GST reduction is anticipated to encourage weekend getaways, pilgrimage tourism, heritage tours, and eco-tourism alike. It is also expected to promote investment in mid-segment hotels, homestays, and guesthouses, which will generate new job opportunities and improve infrastructure across these sectors. This comprehensive growth will support sustainable development in the tourism industry and enhance the travel experience for all visitors.
**Transport Sector Gets a Lift**
In addition to hospitality, the government has cut GST on buses with more than 10 seats from 28% to 18%. This tax reduction is likely to lower ticket prices, especially on semi-urban and rural routes, making public transport more economical and accessible. The move aims to encourage commuters to shift from private vehicles to shared or public transport options, helping to reduce congestion and pollution in these regions.
**Conclusion**
The GST 2.0 reforms represent a strong push by the government to revive and expand India’s tourism sector by making travel and accommodation more affordable while fostering investment and job creation. With these changes, the country is poised to experience sustained growth in domestic and foreign tourism, bolstering the economy and celebrating India’s rich cultural heritage.
https://www.newsbytesapp.com/news/business/gst-reforms-to-boost-hospitality-transport-cultural-sectors-government/story
