We are noting below the consolidated provisions under GST related to Hotels, Restaurants and Hospitality Sector:-
PART I – RATE OF GST ON HOTEL ROOMS
Note – GST is charged based on the Declared Room Tariff which is explained as below:-
“declared tariff includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.”
I) RATE OF GST – Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes:-
1. Declared Room Tariff upto Rs. 999/- : GST @ NIL [Remark – No ITC Credit]
2. Declared Room Tariff from Rs. 1000/- upto Rs. 2499/- : GST @ 12% [ITC Credit allowed]
3. Declared Room Tariff from Rs. 2500/- upto Rs. 7499/- : GST @ 18% [ITC Credit allowed]
4. Declared Room Tariff from Rs. 7500/- and above : GST @ 28% [ITC Credit allowed]
[NOTE : GST Rate is decided on the basis of Declared Room Tariff but the tax is chargeable only on the actual amount charged from the customer/ guest]
FAQ’s on Hotel Room Tariff:-
FAQ 1 : Will GST be charged on actual tariff or declared tariff for accommodation services?
REPLY 1 : Declared or published Tariff is relevant only for determining of the the Tax Rate Slab. GST will be payable on actual amount charged (transaction value).
FAQ 2 : What will be the GST rate if cost goes up (more than declared tariff) owing to additional bed?
REPLY 2 : 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 Rs. 8000/-. GST Shall be charged @ 18% on Rs. 8000/-.
FAQ 3 : Where will the declared tariff be published?
REPLY 3 : Tariff declared anywhere, say on the website through which business is being procured or printed on tariff card or displayed at the reception will be declared tariff. In case different tariff is declared at different places, highest of such declared tariff shall be the declared tariff for the purpose of levy of GST.
FAQ 4 : Same room may have different room tariff at different times depending on season or flow of tourist as per dynamic pricing. Which rate to be used then?
REPLY 4 : In case of 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.
FAQ 5 : If Tariff Changes between booking and actual usage, which rate will be used?
REPLY 5 : Declared Tariff at the time of supply of the service would apply.
FAQ 6 : GST at what rate would be levied if an upgrade is provided to the customers as a lower rate?
REPLY 6 : If declared tariff of the accommodation provided by way of upgrade is Rs. 10000/-, but the amount charged is Rs. 7000/-, then GST would be levied @ 28% on Rs. 7000/-.
PART II – RATE OF GST ON FOOD & BEVERAGES (F&B) SALE
1. All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5% without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
2. Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without ITC.
3. Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC.
[NOTE : For detailed notification please see the following link :https://blog.ritulpatwa.com/rate-of-gst-on-restaurant-amended-w-e-f-15-11-2017/]
PART III – RATE OF GST ON MINOR OPERATING DEPARTMENT (MOD) SALE
1. Outdoor Catering – 18% [ITC Credit Allowed]
2. Mandap Keeper/ Banquet Service – 18% [ITC Credit Allowed]
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
3. Laundry Service – 18% [ITC Credit Allowed]
4. SPA – 18% [ITC Credit Allowed]
5. Telephone, Internet, Safari, & Other Experiences – 18% [ITC Credit Allowed]
6. Renting of Motor Cab – 5% [No ITC Credit Allowed]
7. Supply of Tour Operator Service – 5% [No ITC Credit Allowed]
PART IV : PLACE OF SUPPLY – FOR IDENTIFYING APPLICABILITY OF IGST Vs. CGST/SGST
I) FOR HOTELS:-
1. When Supplier, Recipient and Hotel Property is located in India – It shall be the place where the Hotel is Located [Section 12 of IGST Act]
2. When the Supplier, Recipient are located in India BUT Hotel Property is located outside India – It shall be the place of the Recipient [Proviso to Section 12 of IGST Act]
3. When the Supplier or Recepient are located outside India – It shall be the place where the Hotel is Located [Section 13 (4) of IGST Act]
II) FOR RESTAURANTS
The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed. [Section 12 (4) of IGST Act]
[NOTE : For detailed section please see the following link : https://blog.ritulpatwa.com/place-of-supply-of-service-hotels-restaurants/]