GST (Goods and Services Tax), the much-talked-about, the much-worried-about, tax regulation is finally out! And while we are still grasping when and where it will be applicable, here’s good news for budget travellers!
Sure, GST has its hits and misses. But, the budget travel in India has now become cheaper, thanks to the GST.
Paying for more comfortable travel is going to be expensive, effective from 1st of July 2017, but budget travelling is now going to be economical as compared to the pre-GST scenario.
To begin with, the interstate bus travel will not have any impact of the GST. Meaning, you can travel on a bus anywhere in India at the same price as before. The AC and First-class rail travel will have a marginal increase of 0.5% post-GST.
While the business class tickets for flights will have a GST of 12% as compared to the previous 9%, the economy class tickets will have a GST of 5% in place of the old 6%. So as long as you don’t mind travelling in economy class, GST is good for you.
Direct flights overseas will become expensive, but there’s a hack to this. Since GST will be applicable on the first leg of the journey out of India, taking a connecting flight, especially from Dubai will be cheaper. The closer your first international layover, the lesser GST you will pay.
Hiring a car and drive around, or using a private cab is also going to be cheaper. The previous 6% tax is now rounded-off at 5%. Yet another reason to head out!
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For accommodation as well, the budget travellers have an advantage. Hotels that charge 1000 INR or less will be exempted from GST and as the room prices get higher, the GST percentage will rise. The non-AC restaurants will have a lower GST and the small ones, with a revenue under 50 Lakhs per annum will fall in the minimum tax bracket, with GST 5% or less.
So, if you are a traveller who doesn’t fancy business class and swanky resorts, travel is going to be cheaper. Head out, hire a car or book an economy class ticket, opt for a budget stay and eat at small restaurants and GST will actually cut down your travel expense.