Planning Your First Foreign Holiday? GST Cuts Have Just Made It Cheaper
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For years, a first foreign holiday has remained an aspiration for many Indian families - often delayed due to tight budgets, rising expenses, or other priorities. Now, recent Goods and Services Tax (GST) reductions are turning that dream into reality by freeing up household savings and making travel more accessible for India’s growing middle class.
How GST Cuts Are Fueling Travel Aspirations
The government’s new GST policy has lowered taxes across several everyday essentials, including groceries, household products, and personal care items. While the savings may appear minor on a single purchase, they add up significantly over time. This financial relief allows families to reallocate funds toward bigger aspirations, such as their first foreign holiday.
Hotels and Flights Now More Affordable
The hospitality sector has been a major beneficiary of GST cuts. Mid-range hotels, once taxed at 12% with Input Tax Credit (ITC), are now under a 5% slab without ITC for rooms priced between ₹1,000 and ₹7,500. This shift makes domestic stopovers, family vacations, and even staycations cheaper, helping travellers save for international journeys.
Airfares remain steady with a 5% GST on economy-class tickets. While rates haven’t changed, the consistency provides households with greater predictability in planning, ensuring that sudden fare hikes do not derail holiday budgets.
Big Purchases Lighten the Financial Load
The GST relief is not limited to daily needs. Reduced taxes on electronics, vehicles, and insurance have lowered financial pressure on households. With major expenses becoming more manageable, families are increasingly confident about spending on experiences like travel.
Travel expert Mohak Nahta, Founder and CEO of Atlys, notes, “Every rupee saved creates more room in household budgets. With international travel becoming a lifestyle choice rather than a luxury, GST cuts will directly encourage families to take their first foreign holiday.”
Millions of Indians Ready for International Travel
India’s travel potential is immense. Between 2014 and 2023, over 10 crore passports were issued, yet only 8.71% of Indians currently hold an active one. This indicates a massive untapped market of first-time travellers.
What’s shifting now is the mindset. Foreign holidays, once seen as privileges of the elite, are increasingly embraced by families from Tier-2 and Tier-3 cities such as Indore, Jaipur, Coimbatore, and Lucknow.
Affordable International Gateways for First-Time Travellers
Tour operators are curating budget-friendly international packages that combine domestic stopovers with short-haul trips. Countries in Southeast Asia, Sri Lanka, and the Middle East are emerging as top destinations for first-time international tourists, thanks to their affordability, proximity, and simplified visa processes.
A Market Poised for Take-Off
GST savings are more than just a tax reform - they are reshaping household priorities. Lower costs on daily essentials and hotels create ripple effects that empower families to finally book that long-postponed international trip.
For India’s middle class, the dream of a first foreign holiday is no longer distant. With GST cuts lightening the financial burden, the chance to collect that first passport stamp is now closer than ever.
How GST Cuts Are Fueling Travel Aspirations
The government’s new GST policy has lowered taxes across several everyday essentials, including groceries, household products, and personal care items. While the savings may appear minor on a single purchase, they add up significantly over time. This financial relief allows families to reallocate funds toward bigger aspirations, such as their first foreign holiday.
Hotels and Flights Now More Affordable
The hospitality sector has been a major beneficiary of GST cuts. Mid-range hotels, once taxed at 12% with Input Tax Credit (ITC), are now under a 5% slab without ITC for rooms priced between ₹1,000 and ₹7,500. This shift makes domestic stopovers, family vacations, and even staycations cheaper, helping travellers save for international journeys.
Airfares remain steady with a 5% GST on economy-class tickets. While rates haven’t changed, the consistency provides households with greater predictability in planning, ensuring that sudden fare hikes do not derail holiday budgets.
Big Purchases Lighten the Financial Load
The GST relief is not limited to daily needs. Reduced taxes on electronics, vehicles, and insurance have lowered financial pressure on households. With major expenses becoming more manageable, families are increasingly confident about spending on experiences like travel.
Travel expert Mohak Nahta, Founder and CEO of Atlys, notes, “Every rupee saved creates more room in household budgets. With international travel becoming a lifestyle choice rather than a luxury, GST cuts will directly encourage families to take their first foreign holiday.”
Millions of Indians Ready for International Travel
India’s travel potential is immense. Between 2014 and 2023, over 10 crore passports were issued, yet only 8.71% of Indians currently hold an active one. This indicates a massive untapped market of first-time travellers.
What’s shifting now is the mindset. Foreign holidays, once seen as privileges of the elite, are increasingly embraced by families from Tier-2 and Tier-3 cities such as Indore, Jaipur, Coimbatore, and Lucknow.
Affordable International Gateways for First-Time Travellers
Tour operators are curating budget-friendly international packages that combine domestic stopovers with short-haul trips. Countries in Southeast Asia, Sri Lanka, and the Middle East are emerging as top destinations for first-time international tourists, thanks to their affordability, proximity, and simplified visa processes.
A Market Poised for Take-Off
GST savings are more than just a tax reform - they are reshaping household priorities. Lower costs on daily essentials and hotels create ripple effects that empower families to finally book that long-postponed international trip.
For India’s middle class, the dream of a first foreign holiday is no longer distant. With GST cuts lightening the financial burden, the chance to collect that first passport stamp is now closer than ever.
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