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GST Rate Cuts 2025: Big Savings On Dining, Travel & Everyday Services

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Taxes make most people frown. But they're making people happy this September.

On September 3, 2025, Union Finance Minister Nirmala Sitharaman led the GST Council in announcing rate cuts for many important customer areas, such as accommodation, travel, and food. This is just in time for India's busy wedding and holiday season.

Effective September 22, the new rates will save more money for consumers. It will increase travel and tourism and bring back city demand after the pandemic.

Let's look at where you'll save money and how these changes will affect Indian life in general.

Dining Out Becomes More Affordable

They just made going out to eat a lot cheaper. The GST Council's decision will save you money immediately, whether you're going out for lunch every day or dining out on the weekend.

• Old GST Rates (Restaurants):

Before this change, the GST you paid changed based on where you went, especially if it had air conditioning.

◦ AC Restaurants: 12% or 18%

◦ Non-AC Restaurants: 12%

• New GST Rate: Flat 5% (without ITC):

The GST on food has been reduced to 5%, regardless of whether you're dining in a mall food court or a posh rooftop cafe.

Real-World Example:

Let us look at a real bill to see how this will affect your money.

• Before: ₹1,000 meal at an AC restaurant = ₹1,180 (with 18% GST)

• Now: ₹1,000 meal = ₹1,050 (with 5% GST)

• You Save: ₹130 per visit

Not only does this make people happy, but it also helps restaurants get more customers and supports the F&B industry's comeback after COVID. Everyone wins!

Hotels Under ₹7,500/Night Get Cheaper

Hotel costs are about to go down, which is good news whether you're planning a vacation, wedding, or work travel. The new GST system will offer more mid-range and inexpensive stays.

New Hotel Room GST Slabs:

This new arrangement makes things clearer and saves money for Indian travellers. The tax cuts aim to encourage more local travel while making things easier for middle-class families.

Starting September 22, you can expect to pay much less for a moderately priced hotel or rental.

Example:

For the average consumer, it's easier to understand the effect when they compare real-life costs. Depending on the room rate, even a single night's stay is now ₹300 to ₹500 less expensive.

• ₹5,000/night hotel room

◦ Old Total: ₹5,600 (with 12% GST)

◦ New Total: ₹5,250 (with 5% GST)

◦ Savings: ₹350 per night

This will make it much cheaper for the normal Indian to travel for holidays, religious tours, and weddings that take place in other countries.

Domestic Flights: Economy Travel Sees Major Cut

The government has lowered the GST on plane tickets, especially for people flying in economy. A lot of Indians from the middle class are happy about the lower GST rate on plane tickets. It's easier than ever to fly now that the cost of flying is decreasing.

Updated Flight GST Slabs:

Updated GST rates have made tickets cheaper for both economy and business class. These changes might make people want to travel within their country during the holiday and wedding seasons.

This only applies to local airlines, and customers will immediately notice the change.

Flight Savings Breakdown:

Even people who fly a lot can save money on each trip. Over several trips, these savings can add up, making flying cheaper than trains for many.

• You now pay ₹420 less in taxes for a ₹6,000 economy ticket.

• You can save ₹900 with a ₹15,000 business class ticket.

This is a significant cut for people who fly a lot, especially during busy holiday travel times.

Luxury Travel Gets More Expensive - And That’s Intentional

The GST on private planes, yachts, helicopters, and other similar luxury services has been raised to 40%. This is to raise taxes on the very rich even more and lower the burden on the middle class.

• Old Rate: 28% + Cess

• New Flat Rate: 40% GST

The government's clear goal is to lower the cost of transport and food for the average Indian while raising taxes on luxuries. According to GST 2.0, this fits with the idea of a rising tax system.

Summary of Key GST Changes

Here is a quick table that shows the most important changes and how they will affect your spending. This table lets travellers, eaters, and event planners in India see how different places are side by side.

Why This Matters Now

This change is part of the GST 2.0 reform, which aims to:

• Simplify GST slabs by cutting down on the number of brackets.

• Spend more on dining out, tourism, and local travel.

• Help businesses get back on their feet after COVID.

• Encourage the growth of jobs in the service and leisure industries

This rate cut couldn't have come at a better time, since holidays like Navratri, Durga Puja, and Diwali are coming up.

Conclusion: India’s Festive Spending Just Got Lighter

The September 3 GST cuts are a big step towards affordability for everyone, from families on a tight budget planning trips for Diwali to students flying home and workers dining out.

These changes show how India's tax system has changed to be more consumer-friendly. They make basic treats easier to get while keeping luxury spending in check.

You can now book that trip, plan that break, or eat out without feeling bad about it—the government just made it a lot cheaper.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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