RATE OF GST ON HOTELS & RESTAURANTS

Posted By on May 21, 2017

The GST Council has announced following fitment rate on Hotels and Restaurants under Goods and Services Tax (GST). The information is being uploaded immediately after the GST Council’s decision and it will be subject to further vetting during which the list may undergo some changes:-

S. No.

Description of Service

GST Rate

Remarks

1.

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes
a) Declared Room Tariff upto Rs. 999/- NIL No ITC Credit
b) Room Tariff from 1000/- to Rs. 2499/- 12% Full ITC Credit is allowed
c) Room Tariff from 2500/- to Rs. 7499/-*

*(Revised from Rs. 4999/- to Rs. 7499/- in the GST Council meeting dated 18-06-17)

18%
d) Room Rent is Rs. 7500/- * or more

*(Revised from Rs. 5000/- to Rs. 7500/- in the GST Council meeting dated 18-06-17)

28%
Commentary by Author: The GST Council has used three different terminologies viz. (1) Declared Room Tariff; (2) Room Tariff and (3) Room Rent for identification of Tax Rate. We are writing a representation to the GST Council to issue a clarification on this issue to avoid interpretation disputes in future.

2.

Supply of Food / Drinks in a Restaurant
a) Not having (i) Air Conditioning; or (ii) Central Heating; or (iii) License to Serve Liquor 12% Full ITC Credit is allowed
b) Having License to serve Liquor 18%
c) Having Air Conditioning or Central Heating 18%
d) 5 star and above Rated Hotels with Air Conditioning in Restaurant 18%*
* Revised from 28% to 18% in GST Council meeting dated 18-06-17

3.

Supply of Food / Drinks in Outdoor Catering 18% Full ITC Credit is allowed

4.

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 18% Full ITC Credit is allowed

5.

Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, go-carting, casinos, race-course, ballet, any sporting event such as IPL and the like; 28% Full ITC Credit is allowed

6.

Supply of tour operators’ services 5% No ITC Credit

7.

Renting of motorcab(If fuel cost is borne by the service recipient, then 18% GST will apply)
5% No ITC Credit

8.

All other services not specified elsewhere including other MOD Sales 18% Full ITC Credit is allowed

9.

Composition Scheme (Optional) – For Turnover upto Rs. 50 Lakhs:- 5% No ITC Credit
On supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.
Commentary by Author: Small Taxpayer opting for payment of tax under the Composition Scheme must review before opting, that they comply with the eligibility criterion mentioned under Section 10 (2) of the Central GST Act, 2017 or similar provisions under the respective State GST Act including (but not limited to) restriction on Interstate Sale and sale through E-Commerce Operator.

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