The Federation of Jharkhand Chamber of Commerce and Industries (FJCCI) on Saturday urged the Jharkhand state government to reconsider the recently approved city tourist tax, warning that the levy on hotel stays could harm the tourism and hospitality sectors and increase costs for travelers.
Background of the Tax
The concern follows the Jharkhand cabinet’s approval of the Jharkhand City Tourist Tax Rules, 2025. After receiving cabinet approval, the rules are expected to be taken up during the next session of the state assembly for passage, after which they must be sent to the governor. Once assented by Raj Bhavan, the rules will come into force.
Details of the Proposed Levy
Under the new rules, tourists staying in urban hotels would pay an additional tax linked to the GST category of the hotel. According to cabinet details shared after the decision, domestic tourists may pay an extra 2% to 5% on hotel bills, while foreign tourists could be charged between 4% and 10%.
Industry Concerns
Chamber representatives on Sunday stated that the hospitality sector is already paying GST ranging from 5% to 18%, and another levy could make hotel accommodation more expensive. FJCCI general secretary Rohit Agarwal said the proposed tax runs contrary to the spirit of the GST regime. “The GST system was introduced with the principle of ‘One Nation, One Tax’. Imposing another tax on hotel stays may create an unnecessary burden on both hotels and consumers,” he said.
The chamber also met hotel operators, many of whom voiced concern over the likely impact on occupancy and tourism growth. “Jharkhand is still developing its tourism market. Any additional levy may discourage budget travellers, business visitors and event organisers from choosing the state,” said Rajeev Sinha, a Ranchi-based hotel operator.
Impact on Small Hotels
Industry representatives said the move may hit mid-range and small hotels the hardest, as they rely heavily on domestic travellers. They argued that tourists compare total accommodation costs while planning trips, and even marginal increases can influence decisions.
Traveler Perspectives
Reema Singha, a travel blogger from Dhanbad visiting Ranchi, said the levy could alter travel choices, especially for budget-conscious tourists and content creators. “Travel bloggers and regular travellers often stay in multiple hotels during short trips. Even a small increase in accommodation costs adds up over time. Many travellers compare hotel prices carefully while planning weekend trips, and higher tariffs may push them towards cheaper destinations outside Jharkhand,” she said.
