GST on Hotel industry
By: – CA.VINOD CHAURASIA
Goods and Services Tax – GST
Dated:- 25-9-2017
Introduction: This article discusses in detail about the GST taxability of services of provided by hotel industry.
Types of services provided by Hotel Industry:
* Room accommodation services.
* Serving of foods and liquor in restaurant and in room.
* Rent a cab.
* Mandap keeper.
* Banking and financial services like foreign currency exchange.
* Supply of packed food items as mini bar.
* Renting out the premises for events, conferences etc.
* Catering.
* Laundry services.
* Business support services.
* Telecommunication services like telephone, fax, wifi.
* Beauty parlour
* Gymnasium services.
* Club Facility
Applicable GST Tax Rates
Renting of hotels, inns, guest houses, clubs, campsites or other commercial places
Sl. No.
Room Tariff Per Day
Rate of Tax
1
Less INR 1,000
0%
2
Between INR 1000 but less than 2500
12% With Full ITC
3
Betwe
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in 5-star or above rated Hotel
18% With Full ITC
7
Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, go-carting, casinos, race-course, ballet, any sporting event such as IPL and the like;
28% With Full ITC
Point to be Noted:
* Serving of Alcoholic drinks will be outside the preview of GST and local sales tax or VAT shall be applied on the same.
* It is advisable for the hotel to issue the separate bills for alcoholic drinks and foods.
RENT A CAB
1
Rent a cab (If fuel cost is borne by the service provider)
5% with No ITC.
ITC shall be available if cab is booked from other cab operator.
2
Rent a cab (If fuel cost is borne by the service recipient)
18% with ITC Credit.
MANDAP KEEPER
1
Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, cl
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nasium services
18% with full ITC Credit.
7
Club Facility.
18% with full ITC Credit.
How to determine place of supply in case of hotel industry:
Nature of Services
Place of Supply
Accommodation by a hotel, inn, guest house, home stay club or campsite
Location of immovable property
Accommodation by a hotel for organising marriage or reception or matters related thereto official, social, cultural, religious, or business function
Location of immovable property
Any services ancillary to the above
Location of immovable property
Restaurants or catering services, personal groomig, fitness, beauty treatment, health services
Location where services are actually performed
Time of Supply:
In case of Food, time of supply would be immediately after the delivery happens
In case of service, time limit of 30 days available for raising the invoice.
For advance booking, the time of supply is due immediately on receipt of money.
Input Tax Credit
Input tax credit is available:
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imes difficult to differentiate between a Value Added Tax and an entertainment tax for the common man. However, under the GST regime customers will see only a single charge on their bill and it would give them a clear picture of the tax they are paying.
* Improved Quality of Service
How many times have you had to wait in the hotel lobby wondering if you would miss your flight back home because your bill was still being prepared? With just one tax to compute, the checking-out process at hotels and restaurants will now become easier – another perk that the hospitality industry can brag about.
* Availability of Input Tax
The tourism and hospitality industry will find it easier to claim and avail input tax credit (ITC) and will get full ITC on their inputs. Before GST, the tax paid on inputs (raw edibles for food, cleaning supplies etc.) could not be adjusted against the output without any complications. However, this will become easier in the GST regime.
The Cons of GST
* Increas
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