Table of Contents
- Faq On Gst In Relating To Hotel Industry
- Q1-will Gst Be Charged On Actual Tariff Or Declared Tariff For Accommodation Services?
- Q2-what Will Be The Gst Rate If The Cost Goes Up (more Than Declared Tariff) Owing To Additional Bed?
- Q3-where Will The Declared Tariff Be Published?
- Q4-same Room May Have Different Tariffs At Different Times Depending On The Season Or Flow Of Tourists As Per Dynamic Pricing. Which Rate To Be Used Then?
- Q5-if Tariff Changes Between Booking And Actual Usage, Which Rate Will Be Used?
- Q6-. Gst At What Rate Would Be Levied If An Upgrade Is Provided To The Customer At A Lower Rate?
- Q7 - what Is Restaurant And Non-restaurant Services?
FAQ on GST in relating to Hotel Industry
Q1-Will GST be charged on actual tariff or declared tariff for accommodation services?
A1-Declared or published tariff is relevant only for the determination of the tax rate slab. GST will be payable on the actual amount charged (transaction value).
Q2-What will be the GST rate if the cost goes up (more than declared tariff) owing to additional bed?
A2-GST rate would be determined according to the 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, the highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST
Q4-Same room may have different tariffs at different times depending on the season or flow of tourists as per dynamic pricing. Which rate to be used then?
A4-. In case a 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 the upgrade is Rs 10000, but the amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-.
The final rate structure for restaurants applicable
| Sl. No. | nature od Services under Room Rent | applicable GST Rate | Section/ Chapter/ Heading |
| 1 | All stand-alone restaurants irrespective of air-conditioned or otherwise | 5% GST without ITC |
Heading 9963 (Accommodation, food and beverage services) |
| 2 | Food parcels (or takeaways) | 5% GST without ITC | |
| 3 | Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day | 5% GST without ITC | |
| 4 | Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) | 18% GST with full ITC | |
| 5 | Railways Catering & Tourism Corporation Ltd. or their licensees / Indian Railways | 5% GST without ITC | |
| 5 | Outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 | 5% GST without ITC | |
| 6 | Catering in premises with daily tariff of a unit of accommodation is Rs 7501 and above | 18% with ITC |
Online Platform Demand for 5 % GST on Food Bills
Industry officials have demanded that GST be decreased from 18% to 5% from the prior 18% in an attempt to optimize the $3 billion segment on the domestic supply of food.
Especially in comparison to customers who wander down to restaurants, customers who deliver food at their homes and offices charge a 13 percent higher cost on the same meals and drinks as the dine-in tax rate is 5 %, they stated.ustry has been increasing by huge strides. It is worth approximately USD 2.94 billion and is rising at a 22% CAGR. However, the taxation complications arising from the Goods and Service Tax (GST) are likely to be an obstacle to this development, Dibyendu Banerjea comments on Fooza food CMD.
In India, the online foodservice in Online Platform Request for 5% GST on Food Bills Service
'The elevated GST rate of 18% on food delivery service vendors and the absences of credit charged to restaurants for such GST have a negative impact on the industry's growth. A reduction in GST prices would keep the cost of food affordable and generate more jobs in the sector while supporting the initiatives of the government.
Restaurateurs reported that a high commission of 23 to 24 percent on food delivery networks had been a headache for several months after Covid pandemic, even though the dine-in was not standardized.
For all of us, our home delivery sales were valued to 60 percent after Covid's lockdown, which was 40 percent earlier. As prices can't be raised, our primary cause is hit for higher commission fees even though sales have reached pre-covid peaks," Shiladitya Chaudhury, director of Platter Hospitality.
He remained optimistic, that the dine-in customer will return after several months once vaccination hits the mass.
"Business complexity would be impacted most. Development plans for marquee restaurants would have been less achievable from current franchise stores. The GST on royalty and franchise is 18 percent in relation to GST five percent on food bills," stated Banerjea.
Q7 - What is Restaurant and Non-Restaurant Services?
A7 : Electronic commerce operator is now made liable to pay GST on "restaurant services" provided through the e-commerce platform.
This change is not applicable for restaurant services provided from a premise with declared tariff of Rs. 7,500/- or above per day.
This provision shall be effective from January 01,2022.
According to under Section 2(45) of CGST Act, 2017 Swiggy, Zomato qualifies etc is qualify as an "e-commerce operator"
Notification read with Section 9(5) of CGST Act, 2017, Swiggy, Zomato will be responsible to pay GST on restaurant services provided through it's website/app from January 01, 2022.
A restaurant is a business place that prepares & serves food either on the premises or as takeaways.
"Restaurant service means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied". This definition is according with as per NN.11/2017 - CTR,
An example under above category of restaurant is given mention:
- Cloud kitchens providing restaurant services etc.
- Food and beverage sold as a part of restaurant services and which qualifies as restaurant services.
- Stand alone restaurants which are not ice cream parlors or bakeries.
- Restaurants located in a premise where declared tariff is not exceeding Rs. 7,500 per day and providing restaurant services.
Zomato, Swiggy shall be responsible for charging, collecting and paying GST @ 5% on supply of "restaurant services" made by such restaurent thru the Electronic commerce operator platform. The payments will be made after deducting such GST. This is stated as per NN. 17/2021,
For Restaurent with No GSTIN, Electronic commerce operator will be responsible for charging, collecting, paying GST @5% on total order value of sales received.
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