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MICE events, sector badly hit post implementation of 28 % GST
Mumbai : The MICE sector is being badly hit in India after announcement of 28 % GST on five star hotels recently a nine-day conference scheduled to be held in September in Kerala moved to Sri Lanka, with the organisers realizing that footing the GST rate of 28% is way too much than paying taxes in hotels in the neighboring country.
Most five star Hotels across the country have started getting cancellation requests of MICE events as hosting them have become an expensive affair since the GST rates rolled on 1st July 2017.
Hoteliers says that with 28% tax slab, high-end Indian hotels have become steeper than countries like Thailand and Sri Lanka, leading to bookings being renegotiated or even moving to other countries.
A leading five star hotelier in Mumbai said “Calls are pouring in for booked MICE events. “People are expressing concerns and expecting us to renegotiate our base rates. As per an estimated report over 40 MICE events to be held during August and December have been either canceled or moved out of five start hotels. Many of them exploring Srilanka and Thailand being nearest destinations to India.
The same would amount for a big loss of revenue and opportunity loss for the sector.
Although the government has categorically maintained that there are four slabs in the GST, there are seven categories of taxes in total: 28%,18%,12%,5%,3%,0.25% & a 0% (exempt).
Moreover, with the highest rate in the four slabs being at MICE at 28 percent, India easily has the highest GST rate in the world. Compared to India, even European countries like Denmark and Germany, where the standard of living is much higher, have lower tax rates.
This is also cause of the worry for the sector as none of the associations from the MICE segment have till now realized the loss, the sector will witness in time to come and have not made any representation so far to the GST Council concerning the matter.
It’s yet to see if industry associations take this matter seriously before it’s too late.