The Hotels and Restaurants Association of Andhra Pradesh (HRAAP) submitted a detailed representation highlighting critical challenges faced by the hotel and hospitality sector. Led by its president, along with member, the team met BJP state president and explained the financial stress hotels face, particularly medium and budget category establishments, due to the current GST structure. It was highlighted that while hotel accommodation is taxed at 5 per cent GST without Input Tax Credit (ITC), hotels continue to incur high GST costs such as 18 per cent on rentals and capital investments, which cannot be claimed, further leading to a cascading ‘tax on tax’ burden.
HRAAP emphasised that this issue severely impacts MSME hotels, resulting in increased operational costs, reduced profitability, constraints on expansion and modernisation and negative impact on employment and tourism growth. The association requested allowing Input Tax Credit (ITC) on rental expenses, ITC on capital goods for renovating existing hotels and ITC on new hotel projects.
Responding to the representation, BJP state president requested that the issue be addressed. He assured the delegation he would take up the matter with the GST Council and the Union Finance Minister, promising a positive resolution at the earliest.
HRAAP expressed confidence that timely intervention will help restore financial viability, encourage investment and strengthen the tourism ecosystem.
