India GST 2.0 reform: Two-Slab Structure, Hospitality Sector

Key Panel Okays GST 2.0: Two-Slab Overhaul to Boost Growth, Hotels Get Cheaper

By Manu Vardhan Kannan

Published on August 22, 2025

India is preparing to implement its most significant tax reform since the introduction of the Goods and Services Tax (GST) in 2017, with a key panel of ministers approving a shift to a simplified two-slab system. The new structure will feature two primary rates of 5% and 18%, with a special 40% levy on sin and luxury goods, scrapping the existing 12% and 28% brackets. The GST Council is expected to meet in early September to fast-track implementation. The reform comes against the backdrop of rising trade tensions with the United States, where steep tariffs have been imposed on Indian goods. During Independence day celebrations, Prime Minister Narendra Modi announced sweeping tax reforms to support the economy and now this move confirmed that India will reduce GST rates to stimulate consumption and growth. Almost 99% of items currently in the 12% bracket, including butter, fruit juices, and dry fruits, will be moved to the 5% category, a move that will directly benefit consumers as well as FMCG giants such as Nestle, Hindustan Unilever, and Procter & Gamble. However, this simplification could result in a revenue loss of nearly ₹500 billion, equivalent to 0.15% of GDP, sparking concern among states over potential fiscal shortfalls. The Department of Revenue is currently assessing the full impact before final approval.

For the hospitality sector, which has long grappled with a complex GST regime, the overhaul will provide major relief. Hotel stays below ₹7,500 per night will see GST reduced from 12% to 5%, making mid-range and budget accommodations significantly cheaper for travelers. Restaurant services in such hotels will also attract only 5% GST without input tax credit, while hotels that wish to claim credit may continue with the 18% rate. Complimentary breakfasts, packaged food, toiletries, and other daily essentials supplied by hotels will be taxed at 5%, further reducing costs. The simplification of slabs is also expected to make billing easier and reduce confusion for both hotels and guests. Luxury hotels charging above ₹7,500 per night will remain in the 18% bracket, keeping high-end stays unchanged in price, while alcohol, tobacco, and luxury add-ons offered through hotels will shift from 28% to 40%, becoming significantly costlier.

Economists note that the new GST framework could provide households with a stimulus equivalent to 0.6–0.7% of GDP, driven by lower taxation on essentials and services. For the hospitality industry, the changes are likely to boost domestic tourism, increase occupancy in budget and mid-tier hotels, and make restaurant dining in affordable hotels cheaper, while high-end travelers see little relief. At a broader level, the reform reflects India’s push to stimulate demand, simplify compliance, and strengthen domestic consumption while managing revenue risks for states. In doing so, GST 2.0 promises to be a transformative step for both the economy and the hospitality industry, balancing affordability for consumers with the government’s long-term goal of sustainable growth.

Manotsava 2025: India’s National Mental Health Festival Returns to Bengaluru

By Hariharan U

Published on October 31, 2025

The much-awaited second edition of Manotsava – India’s National Mental Health Festival is returning to Bengaluru this November at The Lalit Ashok. Organised by the National Institute of Mental Health and Neurosciences (NIMHANS) and the National Centre for Biological Sciences (NCBS) in collaboration with Rohini Nilekani Philanthropies (RNP), the festival promises two days of meaningful conversations, interactive sessions, and creative engagement around the theme of mental well-being.

This free and open-to-all event brings together experts, researchers, and the general public to explore how mental health connects to our everyday lives. From genetic research, psychedelics, and gut microbiome science to more relatable themes such as workplace burnout, parenting, aging, maternal health, and technology’s influence on mental well-being, the festival will touch on it all.

Visitors can look forward to an array of experiences, including panel discussions, keynote talks, workshops, stalls and exhibits, discussion circles, and live music performances. For families, there’s even a dedicated children’s zone, ensuring an inclusive and engaging atmosphere for all ages.

Manotsava isn’t just an event, it’s a movement to bring mental health into public spaces, making conversations about the mind as normal and open as any other aspect of life.

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IHCL Signs New Taj Hotel in Pondicherry

By Manu Vardhan Kannan

Published on October 31, 2025

The Indian Hotels Company (IHCL), India’s largest hospitality group, has announced the signing of a new Taj hotel in Pondicherry, further expanding its luxury footprint in South India. The upcoming property will be a greenfield project, developed in partnership with Mr. M.K. Rajagopalan of MGM Healthcare.

Spread across 52 acres, the 180-key Taj Pondicherry will offer panoramic views of the Bay of Bengal. Located on the outskirts of White Town, the hotel will feature an all-day dining restaurant, two specialty restaurants, a bar, and a lounge, bringing together refined gastronomy and timeless elegance.

Guests can unwind with Taj’s signature J Wellness Circle, which offers holistic spa therapies and wellness treatments. The property will also include a gym, swimming pool, and multiple recreational amenities for a complete leisure experience.

Designed to host grand social gatherings, the hotel will feature the largest indoor banquet hall in the region, spanning 10,700 sq. ft., along with exclusive beachfront lawns ideal for weddings and outdoor events.

Commenting on the announcement, Ms. Suma Venkatesh, Executive Vice President – Real Estate & Development, IHCL, said,

“Pondicherry has witnessed a steady rise in domestic travel and a rebound in foreign arrivals, reinforcing its position as a key leisure destination. The addition of Taj Pondicherry will cater to the growing demand for large-scale social events in the region. We are delighted to partner with Mr. M.K. Rajagopalan for this project.”

Expressing enthusiasm for the collaboration, Mr. M.K. Rajagopalan, MGM Healthcare, added,

“We are happy to venture into the hospitality sector with IHCL. This hotel will be a landmark destination in the region.”

Known for its French colonial charm, serene beaches, and spiritual ambience, Pondicherry continues to attract travellers from across the world. Popular attractions such as Auroville, Sri Aurobindo Ashram, Pondicherry Museum, Oussudu Bird Sanctuary, and the Puducherry Canyon add to its appeal as a cultural and wellness retreat.

About the Owning Company:

MGM Healthcare is a diversified entrepreneurial venture by Mr. M.K. Rajagopalan, operating three hospitals in Chennai, one in Vizag, and two upcoming projects in Chennai. He also serves as the Chancellor of a renowned university that runs medical colleges in both Puducherry and Chennai.

With this signing, IHCL continues to strengthen its presence across India’s most sought-after leisure destinations, combining luxury, heritage, and hospitality excellence under the Taj brand.