Published Paper Details:

This study explores how Bengaluru, India, a well-known center of business and tourism, is affected by the Goods and Services Tax (GST) on small and medium-sized hotels (SMHs). The city's economy is greatly aided by the hospitality sector, especially the SMH sector, which serves a wide range of clientele, including visitors, business travelers, and foreign nationals. But with the implementation of the Goods and Services Tax (GST) in July 2017, India's tax system underwent a dramatic change that presented these hotels with both opportunities and challenges. This study aims to comprehend the impact of the tax reform on SMHs in Bengaluru, as well as how they are adjusting to the new GST. Several significant obstacles that SMHs encounter under the GST framework are identified by the research. The higher expenses associated with compliance that result from the requirement for staff training, consulting services, and specialized accounting software are a big worry. These expenses can be a big burden for tiny hotels with tight budgets, which could have an impact on their bottom line. The intricacy of the GST filing procedure, which necessitates precise record-keeping and timely return submission, has also proven difficult for hotels without internal tax knowledge. The financial soundness of these establishments has been further strained by worries about the penalty for non-compliance. How the GST affects pricing strategy is another important consideration. Because even a slight increase in price could put hotels in a higher tax band and reduce their ability to compete in the market, the tiered GST rates based on room tariffs have compelled lodging establishments to carefully analyze their pricing strategies. The report also identifies a number of benefits that GST provides to SMHs in spite of these obstacles. The GST's unified tax structure has made taxation simpler overall by doing away with several indirect taxes like service tax, VAT, and luxury tax in favor of a single, all-inclusive tax. Reducing administrative duties and enabling hotels to concentrate more on their core activities are two long-term benefits of this simplification. Another noteworthy benefit of the GST is the availability of input tax credits (ITC), which allow hotels to claim credits for taxes paid on inputs utilized in their operations. This can enhance cash flow management and lessen the overall tax burden. Additionally, the GST's transparency and uniformity have made it simpler for hotels to grow. Based on both qualitative and quantitative data collected via surveys and interviews with hotel owners and managers in Bengaluru, the study's conclusions were made. The findings show that SMHs have differing opinions about GST. Many respondents think that in the long run, the GST system has the ability to bring about beneficial changes, despite the fact that the system's early installation presented substantial obstacles. The analysis comes to the conclusion that Bengaluru's SMHs' ability to adjust to the new tax system and take advantage of its prospects will be a major factor in how well GST works for them. To help these hotels overcome the obstacles and fully profit from GST, the government and industry stakeholders must provide ongoing education and support. Finally, this study sheds light on the impact of GST on SMHs in Bengaluru, making recommendations for enhancing tax compliance, operational efficiency, and overall competitiveness in an ever-changing hospitality sector.