GST 2.0 Opportunity: What B2B Travel Professionals Must Know

Introduction

The 56th GST Council Meeting, held on September 3, 2025, unveiled a major overhaul of India’s GST regime. As GST 2.0 rolls out from September 22, 2025, it streamlines tax slabs and delivers targeted relief to the travel and hospitality sectors—making it a pivotal moment for travel professionals to re-evaluate pricing, sales strategies, and client communications.

What’s Changing: Hotels & Flights

Hotels (Mid-Range)

• Rooms under ₹1,000/night remain GST-free.

• Rooms between ₹1,000–₹7,500/night now attract 5% GST (without ITC)—down from 12% with ITC

• Stays above ₹7,500/night continue at 18% GST.
  
  

Flights

• Economy-class tickets: GST stays at 5%. No change.

• Premium economy, business, and first-class fares: now 18% GST, up from 12%.
  
  

Booking Timing Matters

GST is fixed at the time of booking/payment—not flight date. Book by September 21 to retain current rates (e.g., 12% for premium flights). Book on or after the 22nd? Expect the new GST slab.

Strategic Implications for B2B Travel Stakeholders

1. Pricing & Promotional Strategy

Highlight the reduced GST on mid-range hotel rooms to your corporate clients and partners. Offering stays with lower tax can enhance cost competitiveness and value perception.

2. Urgency Messaging for Premium Airfares

Increased GST on premium airfares creates a narrow window of opportunity. Push early-booking promotions—now is prime time.

3. Distribution & Commission Models

Lower GST may enable better margins on hotel bookings. Meanwhile, revise commission structures for higher-tax flights to maintain profitability and transparency.

4. Communication & Training

Ensure your entire sales and operations team understands the timing-based GST implications. Equip your front-line staff to clearly explain why “booked before 22nd vs after 22nd” matters to clients.

5. Client Advisory & Upsell Opportunities

This change creates a chance to upsell—for example, pairing a mid-range hotel with an economy flight to maximize savings, or marketing the savings potential of timed bookings.

Reimbursement & Refunds Clarity

Cancellations and refunds adhere to the GST rate applied at booking. If a booking at 12% GST is canceled after the change, the refund includes the original GST rate—not the new 18%.
This stability reduces pricing ambiguity and enhances client confidence.

Broader Context: Simplified Slabs & Economic Goals

• The GST structure has been rationalized into two primary slabs: 5% and 18%, plus a new 40% ”sin/luxury” slab.

• GST 2.0 aims to spur consumption, ease compliance, and provide a growth stimulus, especially during the festive and wedding season.

Conclusion & Takeaway

The GST overhaul from September 22, 2025 creates both challenges and opportunities for B2B travel professionals—especially regarding mid-range hotel promotions and premium-class airfare booking strategies. Swift, informed action can deliver cost savings, improved margins, and smarter customer engagement.

Key Action Points:

• Revise hotel package pricing to spotlight 5% GST benefits.

• Accelerate premium air bookings before the September cut-off.

• Overhaul commission models where needed.

• Train teams to address GST-related FAQs.

• Communicate savings transparently to clients.
  
  

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