GST 2.0: What lower rates mean for dining, hotels and festive budgets

The goods and services tax (GST) reform announced under GST 2.0 is set to have a direct impact on how much Indians spend on eating out, festive celebrations, and hotel stays. By cutting GST rates on restaurants, hotels, and key food inputs, the government has aimed to make hospitality more affordable, while giving the industry a push during the festive and wedding season.

Restaurants are among the immediate beneficiaries of lower GST.

Industry players say the move will make menus more competitive and dining more accessible for families and groups during peak festive demand.

Paras Teotia, Co-Founder of Curry Crown, said the cut will “make dining out more affordable and festive dining more attractive,” likely boosting footfall and repeat visits even if menu prices remain stable.

Manish Sharma, Co-Founder of Karigari Restaurant, added that the change will encourage families to celebrate outside the home as “the overall spend feels lighter on the pocket.”

Higher customer volumes, he said, can balance margins and support revenue growth.

Relief on food costs

The GST Council has also reduced rates on essential inputs such as cheese, paneer, bread, milk-based beverages, and plant-based alternatives.

According to Akshay Jatia, CEO of Westlife Foodworld, which operates McDonald’s India (West & South), this will help lower input costs and allow brands to deliver “greater value to customers” while keeping menus relevant and affordable.

Hotels see a boost ahead of weddings and festivals

For the hotel industry, the timing of the GST reduction comes just before the peak season for weddings and celebrations. Industry leaders believe it will drive higher occupancies and unlock fresh opportunities in both luxury and mid-market segments.

Rahool Macarius, Market Managing Director – Eurasia at Wyndham Hotels & Resorts, called the reform “a clear growth catalyst,” especially in tier 2 and tier 3 cities where value-conscious travellers are fuelling new demand.

Hotels in wedding hubs like Udaipur expect a surge in business.

Mahesh Singh Jasrotia, Vice President of Radisson Blu Palace Resort & Spa, Udaipur, said the move will add “fuel to the momentum,” as families and planners find greater value in hosting events.

The reform is particularly impactful for hotels priced below ₹7,500 per night, which will now attract a lower 5% GST.

Sidharth Gupta, Co-Founder and CEO of Treebo Hospitality Ventures, said nearly their entire portfolio falls into this category.

“This will help us offer reduced prices to our guests, unlocking another big wave of travel, especially amongst the middle-income traveller segment,” he noted.