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Budget hotels, flights to get cheaper as GST rates revised
Travel is about to get more affordable.
The GST Council, led by Finance Minister Nirmala Sitharaman, has approved tax cuts for budget hotels and flights across India, with the new rates kicking in from September 22, 2025.
Rooms costing ₹7,500 or less will be taxed at 5%
If you're booking a hotel room for ₹7,500 or less, you'll now pay only a 5% GST (down from the earlier 12%).
Rooms under ₹1,000 stay tax-free. Anything above ₹7,500 still gets taxed at the usual 18%.
This move is expected to boost demand.
Economy and business class fares to see tax cuts
Economy class airfares will also see lower GST—just 5% instead of the previous 12%.
Business class fares drop from an 18% tax rate to just 12%.
The aim? Make travel simpler and more wallet-friendly while giving domestic tourism a healthy push.