Tax authorities have said it is not right to raise hotel room rates citing the new value-added tax or VAT, which replaced the old revenue-based tax on Sunday.

The actual tax burden of the service sector under the new system will likely ease, authorities said.

International hotel chains, including Hilton Hotels & Resorts, Hyatt Hotels Corp and Marriott International Inc, have raised their room rates in the Chinese mainland, effective Sunday, by attributing the rise to VAT, which will be extended to several industries.