Ethical Research - Hotel stocks zoom on reduction in GST rates, corporate taxes


Hotel stocks were up 4-15% in early trade on Monday after the cut in corporate taxes and GST rates.

Chalet Hotels, Hotel Leela, Indian Hotels, Kamat Hotels, Lemon Tree Hotels, Mahindra Holidays, Oriental Hotels, and Royal Orchid gained in morning trade.

The government cut the corporate tax rate from 34% to 25.17% (inclusive of surcharge and cess) effective FY20. The minimum alternate tax rate was reduced from 18.5% to 15% on Friday.

Further, several revisions were made to the goods and services tax (GST) rates following the 37th GST Council meeting for the promotion of the tourism sector on Friday.

The Council approved tax rate cuts on rooms with a tariff of Rs7,500+ to 18% and for those with tariff below Rs7,500 to 12%. GST on room tariffs below Rs1,000 has been scrapped.

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