Hotel rooms, casinos under GST lens: Services in 12% and 28% slabs may face changes, says report

Revenue concerns, however, make certain GST changes tricky

The upcoming GST Council meeting is set to focus on how services currently falling under the 12% and 28% tax slabs will be treated, with some categories in the 18% bracket also under review, a Times of India report said on Monday.

The deliberations begin Tuesday, with state ministers and finance secretaries gathering in New Delhi to examine possible rate adjustments.

As per TOI, hotel stays priced up to Rs 7,500 a night are currently taxed at 12%, while those above this threshold attract 18%. The Centre, which has pushed for rationalisation and simplification, is keen to resolve such classification issues. Air travel too highlights the anomaly, with economy and business classes taxed at different rates.

Revenue concerns, however, make certain changes tricky. Times of India points out that while there is acknowledgment that levies such as 18% on banking services are steep, immediate relief may not be feasible. Insurance is another example: term and health covers are expected to see differential treatment, but general policies like car and home insurance will remain at 18%.

The TOI report further notes that several common-use services continue to face calls for relief. A case in point is apartment maintenance charges — any payment above Rs 7,500 per month to RWAs or housing societies attracts 18% GST, which residents argue is unfair, since most condominium charges easily cross this level. Personal care services such as salons may also be up for tweaks, Times of India adds.

Meanwhile, casino entry services are likely to be shifted to a higher 40% slab, grouping them with other sin and luxury categories. Ahead of the GST Council’s September 3–4 session, the fitment committee of state officials will examine the finer details on Tuesday.

According to Times of India, the larger aim is not only to reduce the tax burden on consumers but also to simplify the rate structure by eliminating the 12% and 28% brackets. Nearly 99% of items under the 12% category are expected to move into the 5% slab as part of this revamp.