If you are planning a year-end vacation, then consider GST 2.0. The changes in GST have changed the cost of travel. This will affect hotels and flights. If you keep some points in mind, you can make your trip cheaper.
GST 2.0 is good news for budget travelers. Now, only 5% GST will be charged on hotel rooms up to ₹7,500 per night. Earlier, it was 12%. Rooms above ₹7,500 will have 18% GST.
For example, if you book a room for ₹7,000, earlier you paid ₹840 as GST. Now, it will be only ₹350. This saves you ₹490 per day. The total rent will be ₹7,350.
But if you book a room for ₹8,000 per night, you will pay ₹1,440 as GST. The total rent will be ₹9,440. This means a room only ₹1,000 more expensive will cost over ₹2,000 extra. So, it is better to choose a hotel under ₹7,500 per night.
Avoid Premium Air Travel if Not Needed
From 22 September 2025, GST on business, premium economy, or first-class flight tickets will rise to 18 percent. Earlier, it was 12 percent. This means business tickets, which are already expensive, will become more costly.
If you need to travel in premium class, book your ticket before 22 September. Even if your journey is after 22 September, the old GST rate of 12 percent will apply if you booked earlier. Economy passengers will continue to pay only 5 percent GST.
GST Refund on Cancelled Tickets
If you booked a ticket with 12 percent GST and later cancel it, the airline will refund the same GST amount. Your refund will not change even after the GST rate goes up.