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Monsoons are here and so is GST. Vacation is on your mind and your inbox is full of promotional emails from Makemytrip, yatra. But you might be concerned that with the roll out of GST, you might end up shelling out more than your planned vacation budget.
With GST coming into effect, consumers may have to pay more for travel and holidays. But with the removal of multiple taxes it will be easier to workout your vacation budget.
Traveling cost may be marginally impacted depending on your mode of transport
Railways might be a bit more expensive post GST. Air and rental cars/cabs fare will reduce by some extent. However, business class travel will cost you more.
Railways:
AC and first-class train fares will go up after the GST as the tax rate is set to increase from 4.5 % to 5%. Non-AC travel, local trains, metro and religious travel will remain exempted from tax.
Air:
Economy class air travel will become marginally cheaper with the tax rate fixed at 5% against the existing 6%. On the other hand, business class tickets will become dearer by 3% with 12% rate as per GST as compared to existing 9%. Also, airlines with thin margins may increase the fares due to increase in operational costs with GST coming into effect, resulting in higher fares for travelers.
Road:
Local buses including mini – buses and pick-up vans, carrying more than 10 individuals, have also been exempted from tax. Also, IGST on inter-state movement of any mode of conveyance from one location to another is also exempt from GST.
Ola, Uber or Meru cabs will become cheaper as the taxes will reduce to 5% from 6%. Similarly, renting of vehicles from car rental services like Zoom Car will also attract 5% tax. However, if the fuel is borne by the customer 18% GST will apply to the service provider. Also, the taxes of toll roads and bridges will continue to be exempt from taxes.
More the luxurious hotel stay , more you have to pay
Staying at hotels post GST will become cheaper as they are currently taxed at 18- 22% and are posed to be under the 18% tax bracket.
In the current scenario, a person staying in a hotel has to pay multiple taxes such as luxury tax, service tax, cesses. Also, Luxury taxes differ from state to state. With GST Coming into effect, only GST will be applicable instead of the multiple taxes. The GST rate will be based on how luxurious your stay will be:
