Cheaper Air Tickets, Affordable Hotels: Check New GST Rates Before Planning Your Festive Travel Across India

Travelling in India is about to get easier on the wallet. Just before the busy festive and wedding season, the GST Council has announced new tax rates that will cut costs for many travellers and diners. From cheaper hotel stays to lower taxes on economy flights and restaurant bills, the changes are set to help families planning holidays or celebrations.

What the GST Council Decided

In its 56th meeting on 3 September 2025, the Goods and Services Tax (GST) Council, chaired by Finance Minister Nirmala Sitharaman, approved major changes to indirect tax rates. These revised rates will take effect from 22 September 2025. The decisions cover hotels, air travel, restaurants, and even luxury transport like private jets and yachts.

Hotel Stays Become More Affordable

For travelers booking mid-range hotels, the GST on rooms priced between ₹1,001 and ₹7,500 a night has been cut from 12% to 5%. This means a room costing ₹4,500 will now carry a tax of only ₹225 instead of ₹540.

• Rooms below ₹1,000 remain tax-free.
• Rooms above ₹7,500 continue to attract 18% GST.

Tourism operators believe this will encourage more domestic travel, especially during the upcoming festive season when hotels are in high demand.

Economy Air Travel Gets Cheaper, Premium Costs More

Passengers flying economy will now pay only 5% GST, down from 12%. This means a typical Pune-to-Delhi round trip could cost less during Navratri and Diwali. However, business, premium economy, and first-class tickets will now be taxed at 18%, up from 12%. 

Finance experts clarify that the tax rate depends on the booking date. If tickets are booked before 22 September, the old GST rates apply, even if the journey takes place later.

Restaurants See Lower Tax

Dining out will also cost less. Restaurants that earlier charged 12–18% GST will now collect just 5%. For families planning meals outside during the festive season, this is expected to give a small relief. Wedding planners and caterers also welcome the move, as lower GST on food services can help reduce event budgets.

Luxury Travel Faces Higher Tax

While middle-class travellers benefit, luxury transport will become more expensive. Private jets, helicopters, and yachts will now attract a 40% GST, compared to the earlier 28% plus 3% cess. The Council has signaled that those who can afford such luxury items should contribute more in taxes. Premium air tickets for business and first-class travelers are also part of this higher-tax category.

Boost for Tourism and Hospitality

Economists believe these changes will support the services sector, especially tourism and hospitality, which were hit hard by the pandemic. Cheaper hotel rooms, economy flights, and restaurant meals are likely to encourage more domestic travel and consumer spending during the festive period.

Disclaimer: This article is for general informational purposes only. Actual costs may vary depending on travel dates, hotel policies, ticketing terms, and other factors. Travellers are advised to check updated booking conditions before making payments.