Weddings get grander with GST

Hindustan Times, Ludhiana | By, Ludhiana
Jul 09, 2017 05:03 PM IST

Cheaper affair: Those with planned celebratory events will save 7% on banqueting

The big fat Indian weddings to be a less expensive affair this season, thanks to goods and services tax (GST ) that has brought down the tax rate on banqueting from 31.04% to 23.9% now. 

The Indian wedding market is the second highest market in the world after the US and is growing at a rate of 20%.(HT File Photo)
The Indian wedding market is the second highest market in the world after the US and is growing at a rate of 20%.(HT File Photo)

Although, the hospitality industry will not have much to cheer, but after sustaining losses running into crores of rupees, post demonetisation induced cash shortage and later due to liquor ban along highways, the reduction in tax rate would augur well for its business prospects in the coming wedding season. 

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Those who have planned weddings, birthday parties and ring ceremonies will be saving 7% on banqueting. The business fraternity, who often organise corporate events in hotels and banquet halls, will also make the most of the opportunity under the new tax regime. The Indian wedding market is the second highest market in the world after the US and is growing at a rate of 20%. 

For an average wedding party with 500 guests in a luxury hotel, the customer was paying Rs 13.10 lakh (average Rs 2,000 banqueting charges per guest) , including taxes but with the GST in place, he will pay Rs 12.35 lakh now so he would be saving Rs 75,000. 

Earlier, there was plethora of taxes on banqueting, including 14.3% value added tax (VAT), 10.50% service tax, 5% service charge, 0.715% VAT service tax and .525 VAT on service charge that in total accounted for 31.04%. But with GST in place, the customer would be paying just 23.09% tax, including 18% GST, 5% service tax and 0.9% GST on service charge. 

Arindam Chakraborty, general manager, Raddisson Blu, said, “With GST in place, the guests booking banquets for social and corporate function will be directly benefitted by 7.14% tax. We will pass on new tax benefits to guests so that they can save some money. We will also be providing special value additions in our services apart from the tax benefits.” 

Amarjeet Singh, president of Ludhiana Marriage Palace Welfare Association, said, “The banqueting and booking of marriage palaces will be cheaper by 7%. Earlier, the tax rate was on the higher side at 25% but with the implementation of the GST, customer would just need to pay 18% now. The number of events might not pick up as customers have their budget fixed where they would organise the wedding or any other event.”

He added, “The reduction in tax on banqueting will not only make it cheaper for the customers but also will improve the revenue generation for government as customers will less likely to resort to under billing as they used to earlier.” 

Gurbeer Singh, a city resident, said, “My son’s marriage is scheduled on October 12 and I have decided to book the banquet hall in Shehanshah palace in advance. Saving Rs 1 lakh, including banqueting and hall booking for one function is a big deal for me.” 

 Corporates to benefit  

The industrial hub of the region, Ludhiana, see hosts of corporate events, including meetings, seminars, conferences, exhibitions and events where business delegates from overseas and other parts of the country often visit the city to fulfil their trade related commitments. With reduction in banqueting rates, the corporates will be drawn to conduct more such workshops and meetings to avail benefits under the new tax regime. 


    Sumeer Singh is a staff correspondent at Ludhiana. He covers industry, transport, district courts and sports.

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