Table of Contents
FAQs ON GST ON HOTELS & RESTAURANT INDUSTRY
Q.: A hotel is registered on the Fab hotels site. Fab hotels give their listing on Goibibo. During this case, Gobibo was not having any information in respect of such hotel. In this case who is susceptible to collect TCS?
As per Sr no. 28 of FAQ on TCS issued by GST council, the e-commerce operator making payment to the hotelier is liable for collection of TCS. Hence, the Fab hotel is liable to collect TCS in such case.
Q.: A hotel provides free laundry services of two clothes as a complimentary service. How will GST be applied in such a situation?
Providing laundry service is ancillary to the most service of providing accommodation service. Therefore, there's no requirement to charge separate GST on such service.
Q.: How would GST affect you as a restaurant owner?
Restaurant owners have more reason to cheer within the upcoming regime. Under this tax regime, restaurant business owners don't get any choice to adjust the output service tax liability with the credit of input VAT on goods consumed. However, under the new regime both these taxes will get subsumed into GST and thus regardless of goods and services, the credit of input is available for adjustment against the output liability. this may further optimize the capital of such restaurants and successively, consumers can expect a more superior quality of food and services.
Raw materials will be procured at subsidized rates from agriculturalists and farmers at a single stroke rather than owners having to barter taxes shall remain uniform throughout states thus making the competition even. the cost of procuring goods will thus decrease substantially, making the restaurant business a viable and simply manageable venture again.
Q.: What would be the impact of GST on alcoholic selling restaurants?
- Alcohol comes under the Excise and State Tax, and doesn't come under the GST. However, the alcohol and aerated drinks sector are expected to witness better and more effective channels of distribution.
- States shall have administrative regulatory powers over the sale of liquor because the product will not be controlled by the Centre.
- However, additionally to the present alcohol, on the entire, could take a hit because the tax on the ultimate retail product is going to be high because of stringent control- this will indeed lead to a fall in demand within the consumer market, similarly as an adverse impact on foreign investment within the hospitality sector.
- Although foreign entrants could also be slightly skeptical in investing in restaurants and hotels thanks to the rise in liquor costs, and overall this could have a dangerous impact on the sales price, and thereby inducing the customer for purchase of alcoholic beverages.
Hence, we fairly conclude that GST has brought certain reasons to rejoice for both consumers and restaurant owners and we would be having some more reason to explore certain new food joints.
Hope this GST FAQ article cleared most of your apprehensions regarding GST and has made you able to extract the simplest out of this new regime!
Also read : GST Impact on Import and Export
