Cheaper travel, affordable stays, more jobs: How GST 2.0 to boost tourism, transport, culture

Like other key sectors, GST 2.0 will provide much-needed relief to tourism, transport and art & culture sectors. The significant GST rationalisation measures are expected to make India’s tourism sector more affordable, enhancing public transport use, and supporting artisans and cultural industries.

The Centre believes greater affordability in travel and accommodation will expand domestic and foreign tourist inflows. It will also enhance job creation as these sectors will see expanded opportunities. Here's how GST 2.0 will impact the GST cut on these sectors. 

GST cut on hotels (<₹7,500/day) – From 12% to 5% (without ITC)

Lower GST rates will make hotel stays more affordable for middle-class and budget travellers. The measures align India’s hospitality tax structure with international tourism destinations, which is expected to increase foreign tourists' footfall in India.

GST 2.0 could also increase weekend travel, pilgrimage circuits, heritage tourism, and eco-tourism, and will encourage investment in new mid-segment hotels, home-stays, and guesthouses, creating jobs and improving infrastructure.

GST cut on buses (Seating capacity of 10+ persons) – From 28% to 18%

This will cut the upfront cost of buses and minibuses, making them more accessible for fleet operators, schools, corporates, tour providers, and state transport undertakings.

It will also help bring down ticket fares, especially in semi-urban and rural routes, and encourage a shift from private vehicles to shared/public transport, reducing congestion and pollution.

At the industry level, this could support fleet expansion and modernisation, improving comfort and safety standards in public transport.

From 2021 to 2024, Foreign Tourist Arrivals (FTAs) in India showed a significant increase from 15.27 lakh in 2021 to 99.52 lakh in 2024, indicating a robust recovery and growth in tourism post-pandemic. This surge reflects a strong revival in international travel and heightened interest in India as a tourist destination during this period.

GST cut on art and cultural goods – From 12% to 5%

This applies to statues, statuettes, original engravings, prints, lithographs, ornamental articles, stone artware, and stone inlay work. It provides direct support to artisans, craftsmen, and sculptors, many of whom are part of India’s traditional cottage industries. GST 2.0 will also help preserve living traditions of temple art, folk expression, miniature painting, printmaking, and stone craftsmanship.

Through the culture ministry, the Centre has launched comprehensive efforts to preserve, promote, digitise, and globally showcase India's rich cultural heritage, including traditional arts, monuments, and heritage sites, while actively supporting artisans and cultural institutions.

Besides, business-class air travel will now attract an 18% tax, up from 12%, making it costlier, while economy-class travel becomes cheaper with the tax reduced to 5% from 12%.