{"id":16482,"date":"2021-09-07T23:27:53","date_gmt":"2021-09-07T17:57:53","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=16482"},"modified":"2025-03-24T23:44:02","modified_gmt":"2025-03-24T18:14:02","slug":"gst-on-hotels-restaurant-industry","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/","title":{"rendered":"Gst on Hotels and Restaurant Industry"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e7a1c36094d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e7a1c36094d\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#GST_ON_HOTELS_RESTAURANT_INDUSTRY\" title=\"GST ON HOTELS &amp; RESTAURANT INDUSTRY\">GST ON HOTELS &amp; RESTAURANT INDUSTRY<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#Restriction_on_ITC_Credit\" title=\"Restriction on ITC Credit\">Restriction on ITC Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#IMPACT_OF_GST_ON_THE_HOTEL_INDUSTRY\" title=\"IMPACT OF GST ON THE HOTEL INDUSTRY\">IMPACT OF GST ON THE HOTEL INDUSTRY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#GST_SLABS_FOR_HOTELS\" title=\"GST SLABS FOR HOTELS\">GST SLABS FOR HOTELS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#RENTING_OF_BANQUET_HALL_AND_CATERING_SERVICES\" title=\"RENTING OF BANQUET HALL AND CATERING SERVICES\">RENTING OF BANQUET HALL AND CATERING SERVICES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#E-COMMERCE_OPERATORS\" title=\"E-COMMERCE OPERATORS\">E-COMMERCE OPERATORS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#REVERSE_CHARGE_MECHANISM_ON_HOTEL_INDUSTRY\" title=\"REVERSE CHARGE MECHANISM ON HOTEL INDUSTRY\">REVERSE CHARGE MECHANISM ON HOTEL INDUSTRY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#TIME_OF_SUPPLY_OF_SERVICE\" title=\"TIME OF SUPPLY OF SERVICE\">TIME OF SUPPLY OF SERVICE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#PLACE_OF_SUPPLY\" title=\"PLACE OF SUPPLY\">PLACE OF SUPPLY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#SUPPLIER_AND_RECIPIENT_IN_SEPARATE_STATES\" title=\"SUPPLIER AND RECIPIENT IN SEPARATE STATES\">SUPPLIER AND RECIPIENT IN SEPARATE STATES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#SEZ_UNITS\" title=\"SEZ UNITS\">SEZ UNITS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#GST_ON_CANCELLATION_CHARGES\" title=\"GST ON CANCELLATION CHARGES\">GST ON CANCELLATION CHARGES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#GST_will_apply_to_hotel_train_andor_ticket_cancellation_fees\" title=\"GST will apply to hotel, train, and\/or ticket cancellation fees.\">GST will apply to hotel, train, and\/or ticket cancellation fees.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#REGISTRATION_REQUIREMENT\" title=\"REGISTRATION REQUIREMENT\">REGISTRATION REQUIREMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#ONLINE_BOOKING_FROM_THIRD_PARTY_PORTAL\" title=\"ONLINE BOOKING FROM THIRD PARTY PORTAL\">ONLINE BOOKING FROM THIRD PARTY PORTAL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#INPUT_TAX_CREDIT_ITC\" title=\"INPUT TAX CREDIT (ITC)\">INPUT TAX CREDIT (ITC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/gst-on-hotels-restaurant-industry\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"GST_ON_HOTELS_RESTAURANT_INDUSTRY\"><\/span><span style=\"color: #000080;\"><strong>GST ON HOTELS &amp; RESTAURANT INDUSTRY<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-22789\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/IMPACT-OF-GST-ON-THE-HOTEL-INDUSTRY.jpg\" alt=\"IMPACT OF GST ON THE HOTEL INDUSTRY\" width=\"862\" height=\"453\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/IMPACT-OF-GST-ON-THE-HOTEL-INDUSTRY.jpg 310w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/IMPACT-OF-GST-ON-THE-HOTEL-INDUSTRY-300x158.jpg 300w\" sizes=\"(max-width: 862px) 100vw, 862px\" \/><\/p>\n<ul>\n<li>The tourism industry incorporates a clearly noticeable contribution to the Indian Economy, and also the contribution is going to be higher within the near future. Hotels and restaurants are a significant part of this industry and without them, the industry can\u2019t survive.<\/li>\n<li>It provides employment opportunities to a large population and various micro; small and medium entrepreneurs are obsessed with it. That\u2019s why the govt can\u2019t ignore the issues the industry is facing. Services provided by the hotel\u00a0could be a\u00a0taxable service in GST.<\/li>\n<li>The place of supply, in case of such supplies, shall be the state\/union territory wherein the hotel\u00a0is situated, irrespective of whether the guest\u00a0is a\u00a0registered person or not and has GSTIN of some other state.<\/li>\n<li>Therefore, a hotel\u00a0must\u00a0charge SGST and CGST always. The guest can claim ITC of SGST and CGST, being paid in respect of hotel service, within the\u00a0same state.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>EXAMPLE<\/strong><\/span><\/p>\n<ul>\n<li>A registered person in Delhi opts for a business trip to Delhi. In such a case, the hotel in Delhi will charge SGST and CGST and issued a bill, mentioning the GSTIN of the guest. Thus the registered person can take ITC of GST paid.<\/li>\n<li>Now suppose the same person resides in a hotel in Mumbai for a business trip. The hotel in Mumbai charged SGST and CGST and issued a bill with guest GSTIN. Since the businessman isn&#8217;t registered in Mumbai, he won&#8217;t be eligible to take an input tax credit of such GST paid.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Restriction_on_ITC_Credit\"><\/span><span style=\"color: #000080;\"><strong>Restriction on ITC Credit<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Restriction on ITC Credit under Notification 11\/2017-Central Tax (Rate), Mainly in cases where a concessional 5% Goods and services tax rate is opted for without Input Tax Credit eligibility.<\/p>\n<ul>\n<li><strong>Hotel Services and Input Tax Credit Eligibility:<\/strong> If a business books hotels for employees\/clients for business purposes, Input Tax Credit is generally allowed only if Goods and services tax is paid at standard rates (e.g., 12%\/18%). If Goods and services tax is paid under a composite scheme (5% without Input Tax Credit), then Input Tax Credit is not available.<\/li>\n<li><strong>Tour Packages and Input Tax Credit Restriction: <\/strong>If the tour operator pays 5% Goods and services tax on the entire package (including hotels), Input Tax Credit on such services (including hotel purchases) is blocked under Notification 11\/2017.<\/li>\n<li><strong>Resolution in Case of ITC Reversal: <\/strong>If Input Tax Credit is wrongly claimed on hotel services where 5% Goods and services tax was paid, it may be disallowed. The correct approach is to ensure the Input Tax Credit is claimed only on hotels where 18% Standard Goods and services tax rates Apply.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"IMPACT_OF_GST_ON_THE_HOTEL_INDUSTRY\"><\/span><strong><span style=\"color: #000080;\">IMPACT OF GST ON THE HOTEL INDUSTRY<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Even the hospitality industry was vulnerable to pay multiple taxes and handling them was a tedious task Just like every other sector, A hotel with a space tariff of over \u20b91,000 was chargeable for 15% Service tax Before the inception of GST,<\/li>\n<li>Further, after the abatement,\u00a0the value\u00a0was\u00a0dropped at\u00a0somewhere around 8-10%. That\u2019s not all. After that, VAT\u00a0together with\u00a0luxury tax was applied to\u00a0the said value.<\/li>\n<li>Service tax was charged at\u00a0an effective\u00a0rate of 6% on the bills generated. And\u00a0this is often\u00a0apart from\u00a0the VAT. However, after the introduction of GST regime, under the hospitality industry, things\u00a0became\u00a0certain cumbersome free and services which were earlier taxed separately, would now be taxed as a bundle.<\/li>\n<li>Not to mention, it&#8217;s reduced the end-user costs. Meaning, the industry is now likely to draw in more overseas tourists, improve the government\u2019s revenues, and boost the industry\u2019s growth.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Talking about the hotel GST rate,\u00a0it&#8217;s\u00a0levied\u00a0based on\u00a0the tariff.<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16483\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/Picture1-300x72.png\" alt=\"GST HOTEL TARIFF \" width=\"780\" height=\"187\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/Picture1-300x72.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/Picture1.png 702w\" sizes=\"(max-width: 780px) 100vw, 780px\" \/><\/p>\n<p><strong><a href=\"https:\/\/carajput.com\/blog\/gst-impact-on-real-estate\/\" data-cke-saved-href=\"https:\/\/carajput.com\/blog\/gst-impact-on-real-estate\/\">All read on : GST Impact on the Real Estate industry\u00a0<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"GST_SLABS_FOR_HOTELS\"><\/span><span style=\"color: #000080;\"><strong>GST SLABS FOR HOTELS<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The GST rate\u00a0isn&#8217;t\u00a0based on\u00a0the Star rating of a hotel. It solely depends on\u00a0the value\u00a0charged.<br \/>\nThus,\u00a0the ultimate\u00a0rate structure for hotels applicable as on date\u00a0could also be\u00a0summed up as follows:<\/li>\n<\/ul>\n<table style=\"height: 282px;\" width=\"929\">\n<tbody>\n<tr>\n<td width=\"107\"><strong><u>S. NO.<\/u><\/strong><\/td>\n<td width=\"201\"><strong>RENT OF SINGLE ROOM<\/strong><\/td>\n<td width=\"189\"><strong>APPLICABLE GST RATE<\/strong><\/td>\n<td width=\"210\"><strong>GOVERNING CODE<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"107\"><strong>1.<\/strong><\/td>\n<td width=\"201\">RS. 0\/- TO RS. 1,000\/- PER DAY<\/td>\n<td width=\"189\">12% GST from 18th July 2022<\/td>\n<td rowspan=\"3\" width=\"210\">&nbsp;<\/p>\n<p>HEADING\u00a09963<\/p>\n<p>(ACCOMMODATION, FOOD AND BEVERAGE SERVICES)<\/td>\n<\/tr>\n<tr>\n<td width=\"107\"><strong>2.<\/strong><\/td>\n<td width=\"201\">RS. 1,001\/- TO RS. 7,500\/- PER DAY<\/td>\n<td width=\"189\">12% GST WITH FULL ITC | Heading 9963<br \/>\n(Accommodation,\u00a0\u00a0 food\u00a0\u00a0 and beverage services)<\/td>\n<\/tr>\n<tr>\n<td width=\"107\"><strong>3.<\/strong><\/td>\n<td width=\"201\">RS. 7,501\/- AND ABOVE PER DAY<\/td>\n<td width=\"189\">18% WITH FULL ITC<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li>CBIC has decided that the room rent received by &#8220;sarais&#8221; or inns run by religious and philanthropic organisations will not be charged GST.<\/li>\n<li>After confusion over the GST on room rent, CBIC clarified this. The GST Council decided in June that there would be a 12 percent GST on all hotel room bookings that cost less than Rs 1000 per day.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>RESTAURANT INDUSTRY<\/strong><\/span><\/p>\n<table style=\"height: 708px;\" width=\"900\">\n<tbody>\n<tr>\n<td width=\"65\"><strong><u>S. NO.<\/u><\/strong><\/td>\n<td width=\"313\"><strong><u>RENT OF SINGLE ROOM<\/u><\/strong><\/td>\n<td width=\"142\"><strong><u>APPLICABLE GST RATE<\/u><\/strong><\/td>\n<td width=\"128\"><strong>GOVERNING CODE<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>1<\/strong><\/td>\n<td width=\"313\">ALL STAND-ALONE RESTAURANTS WHETHER AIR CONDITIONED OR NOT<\/td>\n<td width=\"142\">5% WITHOUT ITC<\/td>\n<td rowspan=\"7\" width=\"128\">&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>HEADING\u00a09963<\/p>\n<p>(ACCOMMODATION, FOOD AND BEVERAGE SERVICES)<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>2<\/strong><\/td>\n<td width=\"313\">FOOD PARCELS<\/td>\n<td width=\"142\">5% WITHOUT ITC<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>3<\/strong><\/td>\n<td width=\"313\">RESTAURANTS IN HOTEL PREMISES HAVING RENT OF EACH ROOM LESS THAN RS. 7500\/DAY<\/td>\n<td width=\"142\">5% WITHOUT ITC<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>4<\/strong><\/td>\n<td width=\"313\">RESTAURANTS IN HOTEL PREMISES HAVING ROOM TARIFF OF RS 7500 AND ABOVE PER UNIT PER DAY (EVEN FOR A SINGLE ROOM)<\/td>\n<td width=\"142\">18% WITH ITC<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>5<\/strong><\/td>\n<td width=\"313\">IRCTC OR THEIR LICENSEES \/ INDIAN RAILWAYS<\/td>\n<td width=\"142\">5% WITHOUT ITC<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>5<\/strong><\/td>\n<td width=\"313\">OUTDOOR CATERING SERVICES OTHER THAN IN PREMISES HAVING RENT OF EACH ROOM MORE THAN RS 7500\/DAY.<\/td>\n<td width=\"142\">5% WITHOUT ITC<\/td>\n<\/tr>\n<tr>\n<td width=\"65\"><strong>6<\/strong><\/td>\n<td width=\"313\">CATERING IN PREMISES HAVING RENT OF EACH ROOM MORE THAN RS 7500\/DAY.<\/td>\n<td width=\"142\">18% WITH ITC<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Thus, the GST rate applicable on restaurants services are as follows &#8211;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"RENTING_OF_BANQUET_HALL_AND_CATERING_SERVICES\"><\/span><span style=\"color: #000080;\"><strong>RENTING OF BANQUET HALL AND CATERING SERVICES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Under banquet hall services,\u00a0the first\u00a0service provided is renting of a premises for conducting\u00a0a happening.\u00a0it&#8217;s going to\u00a0be with or without accommodation\/ food facilities.<\/li>\n<li>However, under restaurant and hotel services\u00a0the fundamental\u00a0service provided is food and accommodation respectively.<\/li>\n<li>In case banquet hall services are provided together with food and accommodation services, the identical shall be considered as composite supply of services and also the following SAC shall be applicable on such services:<\/li>\n<\/ul>\n<table style=\"height: 572px;\" width=\"936\">\n<tbody>\n<tr>\n<td width=\"145\"><strong>CHAPTER\/ SECTION\/ HEADING<\/strong><\/td>\n<td width=\"224\"><strong>DESCRIPTION OF SERVICE<\/strong><\/td>\n<td width=\"80\"><strong>CGST<\/strong><\/td>\n<td width=\"93\"><strong>SGST\/ UTGST<\/strong><\/td>\n<td width=\"73\"><strong>IGST<\/strong><\/td>\n<td width=\"94\"><strong>ITC<\/strong><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"2\" width=\"145\"><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>HEADING\u00a09963<\/strong><\/p>\n<p><strong>(ACCOMMODATION, FOOD AND BEVERAGE SERVICES)<\/strong><\/td>\n<td width=\"224\">OUTDOOR CATERING SERVICES OTHER THAN IN PREMISES HAVING RENT OF EACH ROOM MORE THAN RS 7500\/DAY.<\/td>\n<td width=\"80\">2.50%<\/td>\n<td width=\"93\">2.50%<\/td>\n<td width=\"73\">5.00%<\/td>\n<td width=\"94\">NOT AVAILABLE<\/td>\n<\/tr>\n<tr>\n<td width=\"224\">(V) COMPOSITE SUPPLY OF \u201cOUTDOOR CATERING\u201d TOGETHER WITH RENTING OF PREMISES (INCLUDING HOTEL, CONVENTION CENTER, CLUB, PANDAL, SHAMIANA OR ANY OTHER PLACE, SPECIALLY ARRANGED, HAVING RENT OF EACH ROOM MORE THAN RS 7500\/DAY.<\/td>\n<td width=\"80\">2.50%<\/td>\n<td width=\"93\">2.50%<\/td>\n<td width=\"73\">5.00%<\/td>\n<td width=\"94\">NOT AVAILABLE<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"E-COMMERCE_OPERATORS\"><\/span><span style=\"color: #000080;\"><strong>E-COMMERCE OPERATORS<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>E-Commerce Operators or online platforms\u00a0like\u00a0Oyo, Swiggy, Zomato, etc.,\u00a0became\u00a0a very important\u00a0part of\u00a0this industry. They have substantially contributed within the\u00a0industry.<\/p>\n<p>As a part of their service, they bring\u00a0the order of the customers and\u00a0in return, charge commission from them. These transactions\u00a0can be summarized as below &#8211;<\/p>\n<ul>\n<li>GST on hotel tariff or restaurant bill shall be leviable at the rates prescribed rates.<\/li>\n<li>GST\u00a0@\u00a018% be levied on commission paid to e-commerce operators.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"REVERSE_CHARGE_MECHANISM_ON_HOTEL_INDUSTRY\"><\/span><strong><span style=\"color: #000080;\">REVERSE CHARGE MECHANISM ON HOTEL INDUSTRY<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It is to be noted that the hotel and restaurant industry has been exempted from Reverse Charge Mechanism under section 9(4) of the CGST Act, 2017, and hence are not required to apply the same.<\/p>\n<p>According to the section 13 of the CGST Act, 2017, supply\u2019s time for the services\u00a0is going to be\u00a0the earliest of\u00a0the subsequent \u2013<\/p>\n<ul>\n<li>Date of issue of invoice by the supplier, provide the invoice has been issued within the prescribed time period or the date of receipt of payment, whichever is earlier; or<\/li>\n<li>The date on which the service is provided, provided the invoice\u00a0has not been\u00a0issued within the prescribed period or the date on which the payment is received, whichever is earlier.<\/li>\n<li>Date on which the recipient represents the receipt of services in his account\u2019s book,\u00a0just in case\u00a0where provisions of clause (a) or clause (b)\u00a0don&#8217;t seem to be\u00a0applicable:<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"TIME_OF_SUPPLY_OF_SERVICE\"><\/span><span style=\"color: #000080;\">TIME OF SUPPLY OF SERVICE<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The time of supply for hotel and restaurant services\u00a0are going to be\u00a0as following:<\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>If invoice is generated:<\/strong><\/span><\/p>\n<ul>\n<li>Time, when the payment is recorded in books.<\/li>\n<li>when Time, when the invoice has been issued, or<\/li>\n<li>Time, when the service has been rendered<\/li>\n<\/ul>\n<p><strong><span style=\"color: #ff0000;\">If invoice is not generated<\/span><\/strong><\/p>\n<ul>\n<li>Time, when the payment is received or<\/li>\n<li>When Time, when the service has been rendered<\/li>\n<li>Time, when the payment is recorded in books.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"PLACE_OF_SUPPLY\"><\/span><span style=\"color: #000080;\"><strong>PLACE OF SUPPLY<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Section 10(3) of the IGST Act, 2017 stated that within the case of the hotel industry the place of supply are going to be the situation of immovable property and within the case of restaurant location where the services are literally performed.<\/li>\n<li>Such a provision introduced certain issues and hence the same has been discussed below -Bottom of Form<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"SUPPLIER_AND_RECIPIENT_IN_SEPARATE_STATES\"><\/span><span style=\"color: #000080;\">SUPPLIER AND RECIPIENT IN SEPARATE STATES<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In such cases, the placement of the hotel is considered because the place of supply, and CGST and regime GST are going to be levied and not IGST.<\/li>\n<li>Additionally, the recipient of service won&#8217;t be able to avail ITC of the tax paid on such transactions as GST paid in state isn&#8217;t eligible in state <a href=\"https:\/\/www.caindelhiindia.com\/blog\/gst-income-tax-restrictions-on-cash-transactions\/\">GST<\/a> of the recipient.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"SEZ_UNITS\"><\/span><span style=\"color: #000080;\">SEZ UNITS<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per Section 7(5) of the IGST Act, 2017 Place of supply SEZ Units shall be treated to be a supply\u00a0of products\u00a0or services or both\u00a0within the\u00a0course of inter-State trade or commerce.\u201d Furthermore,<\/li>\n<li>it has been clarified that the services of short-term conferencing, accommodation, banqueting etc., being provided to a SEZ developer or a SEZ unit, shall be\u00a0considered as an Inter-State supply\u00a0and shall be chargeable to IGST and not to CGST and SGST.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"GST_ON_CANCELLATION_CHARGES\"><\/span><a href=\"https:\/\/carajput.com\/learn\/pay-gst-on-bookings-of-train-or-air-tickets-hotel-cancellation-charges.html\"><strong><span style=\"color: #000080;\">GST ON CANCELLATION CHARGES<\/span><\/strong><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Mostly, all the hotels take some portion of the amount as booking amount from the customer, at the time of booking of rooms. Such an amount may or may not be 100% refundable as per the conditions prescribed.<\/li>\n<li>If the guest cancels the booking, the hotel charges a cancellation fee and refund the remaining amount, if any.<\/li>\n<li>In such case, the cancellation fees shall be chargeable to GST under SAC 99979 and GST be levied @ 18% irrespective of the rate applicable on the hotel booking.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"GST_will_apply_to_hotel_train_andor_ticket_cancellation_fees\"><\/span><a href=\"https:\/\/carajput.com\/learn\/pay-gst-on-bookings-of-train-or-air-tickets-hotel-cancellation-charges.html\"><span style=\"color: #000080;\">GST will apply to hotel, train, and\/or ticket cancellation fees.<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>GST is not applicable to the recovery of notice pay. But, cancellation fees for bookings made for hotels, flights, trains, etc. would be charged at the same GST rate that would be in force for the primary service.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-22787\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/GST-on-hotel..jpg\" alt=\"GST on hotel.\" width=\"896\" height=\"1410\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/GST-on-hotel..jpg 747w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/GST-on-hotel.-191x300.jpg 191w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/GST-on-hotel.-651x1024.jpg 651w\" sizes=\"(max-width: 896px) 100vw, 896px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"REGISTRATION_REQUIREMENT\"><\/span><span style=\"color: #000080;\">REGISTRATION REQUIREMENT<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>A hotelier is compulsorily required to take up\u00a0registration under GST, where their turnover exceeds the prescribed limit or Rs. 20\/10 lakhs.<\/li>\n<li>If a hotel is registered on e-commerce operators like Goibibo or MakeMyTrip and turnover\u00a0is less\u00a0then specified limit then also\u00a0he&#8217;s\u00a0NOT required\u00a0to get\u00a0registered.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ONLINE_BOOKING_FROM_THIRD_PARTY_PORTAL\"><\/span><span style=\"color: #000080;\"><strong>ONLINE BOOKING FROM THIRD PARTY PORTAL<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>It has become\u00a0quite common\u00a0for hotels\u00a0to induce\u00a0their clients from online portals like Goibibo and MakeMyTrip. If the turnover of hotelier\u00a0is less\u00a0than 20\/10 lakhs and\u00a0is additionally\u00a0not registered voluntarily, then the e-commerce operator (Goibibo) is required\u00a0to collect\u00a0GST on transactions made through it.<\/li>\n<li>Where the hotelier is registered under GST, then he himself would be liable to charge GST from its customer. It is also provided, that the e-commerce operator is susceptible to deduct TCS @ 1% from the booking amount received for the hotelier.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"INPUT_TAX_CREDIT_ITC\"><\/span><span style=\"color: #000080;\"><strong>INPUT TAX CREDIT (ITC)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The hotel is eligible to claim ITC in respect of all goods and services used for providing their service.<\/li>\n<li>However, where the hotel has its restaurant and is charging GST @ 5% then ITC shall not be allowed in respect of such restaurant services.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><span style=\"color: #000080;\">CONCLUSION<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The industry even with all\u00a0the issues\u00a0are heading toward a balanced condition and currently\u00a0it&#8217;s\u00a0recovering from damages caused by Corona.<\/li>\n<li>However,\u00a0it&#8217;s\u00a0still important and playing vital role in Indian Economy. The industry after much uncertainty has finally reached a stage where\u00a0we will\u00a0say that the stabilization of rates has come.<\/li>\n<li>However, the Corona Pandemic has created havoc\u00a0within the\u00a0industry and if proper incentives\u00a0aren&#8217;t\u00a0accorded to\u00a0the sector,\u00a0it&#8217;d\u00a0witness a collapse\u00a0which\u00a0will\u00a0result in huge losses to\u00a0the whole economy, and not just a specific sector.<\/li>\n<\/ul>\n<p>Hope this GST FAQ article cleared most of your apprehensions regarding GST and has made you\u00a0able to\u00a0extract\u00a0the simplest\u00a0out of this new regime!<\/p>\n<p><iframe loading=\"lazy\" title=\"What is GST | GST \u0915\u094d\u092f\u093e \u0939\u0948 | Types of GST Registration | GST Return | GST Registration Process\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/WRnOU8xORgw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>Popular blog:-<\/p>\n<p><a href=\"https:\/\/carajput.com\/publications\/gst-impact-on-import-and-exports.pdf\" data-cke-saved-href=\"https:\/\/carajput.com\/publications\/gst-impact-on-import-and-exports.pdf\">GST Impact on Import and Export\u00a0<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/publications\/effect-of-gst-on-advertising-and-cinema-induatry.pdf\" data-cke-saved-href=\"https:\/\/carajput.com\/publications\/effect-of-gst-on-advertising-and-cinema-induatry.pdf\">Effect of GST on Advertisement and Cinema Industry<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GST ON HOTELS &amp; RESTAURANT INDUSTRY The tourism industry incorporates a clearly noticeable contribution to the Indian Economy, and also the contribution is going to be higher within the near future. Hotels and restaurants are a significant part of this industry and without them, the industry can\u2019t survive. It provides employment opportunities to a large &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[10005],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/16482"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=16482"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/16482\/revisions"}],"predecessor-version":[{"id":29019,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/16482\/revisions\/29019"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=16482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=16482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=16482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}