Amidst GST, a nightmare for Hospitality Sector
By: – Anish Goyal
Cenvat Credit
Dated:- 27-10-2016
Service Tax on renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes has to be charged at the rate of 60% ( i.e. abatement 40%) as per Sr. No. 6 of the Abatement Notification No. 26/2012-ST dt. 20.06.2012. The condition provided for granting an abatement of 40% is written as “same as above”. The relevant extract of Sr. No. 6 of Notification No. 26/2012-ST dt. 20.06.2012, reads as under:
Sl.
No.
Description of taxable
service
Percentage
Conditions
6
Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for resident
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ithout accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport.
10
CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.”
The condition mentioned in Sr. No. 5A, stated supra stipulates that CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004. However, the condition mentioned in Sr. 6 granting the accommodation service providers to pay service tax on 60% remains unchanged, it still reads, “same as above”. Thus
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