Goods and Service Tax (GST) is a destination based consumption tax which is a levy of tax on all goods and services with the objective of expanding the tax base through wide coverage of economic activities , mitigating the cascading effect , reduction of exemptions , enable better compliance etc. thereby resulting into formation of common national market for goods and services .
Under GST, all tax invoices raised contain a HSN Code or SAC code for the respective goods or services supplied. Hotels and restaurants would have to use SAC Code.
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.
GST RATES APPLICABLE ON HOTELS
The GST rate applicable for hotels, inns, guest houses, clubs, campsites or other places for temporary stay would depend on the type of facility, star rating and room rent per day charged.
|Tariff per night||Gst rate|
|Less than INR 1000||NO TAX|
|MORE THAN INR 1000 BUT LESS THAN INR 2500||12%|
|MORE THAN INR 2500 BUT LESS THAN INR 7500||18%|
|MORE THAN INR 7500||28%|
18% GST rate is applicable on 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, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises.
Rate for amusement park
For entertainment events and amusement facilities – GST rate of 28 % will be applicable.
What will be the rate – In case of hotel provide discount on tariff value
The GST rates applicable on all accommodation establishments (hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes) depends on the declared tariff per unit per day by the respective establishment. If a discount is provided, then the slab of GST rate applicable (as per table above) will remain the same, however, the rate would be charged on the actual tariff charged.
Returns required for Hotel industry
For turnover upto Rs. 1.5 cr. (file quarterly)
Jul-Sep 10th January 2018
Oct-Dec 15 February 2018
Jan-Mar 30 April 2018
Last date for filing of Monthly return in FORM GSTR-1 for for July-September , 2017 for Registered persons having Aggregate turnover of up to 1.5 crore , has been extended to 10thJanuary, 2018 from earlier due date of 31st December, 2017
For turnover of more than Rs 1.5 cr. (file monthly)
July-October 2017 10 January 2018
November 2017 10 January 2018
December 2017 10 February 2018
January 2018 10 March 2018
February 2018 10 April 2018
March 2018 10 May 2018
Last date for filing of Monthly return in FORM GSTR-1 for July-October, 2017 for Registered persons having Aggregate turnover of more than Rs 1.5 crore , has been extended to 10th January, 2018 from earlier due date of 31st December, 2017 (NotificationNo.72/2017 ).
Filing GSTR-3B is mandatory for hotels and restaurants who fall under the GST regime. If you’ve had no transactions at your property in these two months, you need to file a nil GSTR-3B form.
GSTR-3B return will have to be filed by all taxpayers in addition to GSTR-1, GSTR-2 and GSTR-3 return. Earlier, GSTR-3B returns were to be filed for the month of July to December 2017.
IN 23rd council meeting, it has been announced that GSTR-3B return must be filed for all months from July 2017 to March 2018. The due date for GSTR-3B return will be the 20th of every month.
Late fees for GSTR-3B of July, Aug. and Sept waived. Any late fees paid for these months will be credited back in electronic cash ledger under Tax and can be utilized to make GST payments.
Restaurants whose turnover is up to Rs. 100 lakhs per year are eligible to be registered under the GST composition scheme, Restaurants registered under the GST composition scheme will have to pay GST at the rate of 5% of aggregate turnover
FAQ ON GST (RELATING TO HOTEL INDUSTRY) - Circular No. 27/01/2018-GST
Q1-Will GST be charged on actual tariff or declared tariff for accommodation services?
A1-Declared or published tariff is relevant only for determination of the tax rate slab. GST will be payable on the actual amount charged (transaction value).
Q2-What will be GST rate if cost goes up (more than declared tariff) owing to additional bed?
A2-GST rate would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs. 7000 per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs. 8000.
Q3-Where will the declared tariff be published?
A3-Tariff declared anywhere, say on the websites through which business is being procured or printed on tariff card or displayed at the reception will be the declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST
Q4-Same room may have different tariff at different times depending on season or flow of tourists as per dynamic pricing. Which rate to be used then?
A4-. In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply
Q5-If tariff changes between booking and actual usage, which rate will be used?
A5-Declared tariff at the time of supply would apply.
Q6-. GST at what rate would be levied if an upgrade is provided to the customer at a lower rate?
A6-If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-.