GST TAX RELIEF FOR HOTELS

GST TAX RELIEF FOR                                                                                   

                  Upcoming GST on The Hotel Industry

                                                                                                                                                                                                                                                                            

The GST Council has agreed to lower tax rates imposed on the hotel industry during its meeting on Friday. Led by Finance Minister Nirmala Sitharaman, the all-powerful council decided to tax hotels on rates varying from 18 to zero per cent, depending on their tariffs. With this, the hotel industry has been removed from the 28 per cent tax slab, the highest under the GST regime.

The GST Council has decided to tax hotels with room tariff of Rs 7,500 and above at 18 per cent instead of the earlier 28 per cent. Hotels with tariffs in the range of Rs 1,000 to Rs 7,500 will have to pay GST at a rate of 12 per cent. Lastly, hotels with tariffs below Rs 1,000 have been exempted from paying taxes under the GST regime, according to sources.

The GST Council has also agreed to lower tax rates on outdoor catering to 5 per cent, with the option to avail input tax credit.

Additionally, the GST Council has reportedly decided to increase the tax rate for caffeinated drinks to 28 per cent from 18 per cent. An additional 12 per cent cess would also be imposed on such beverages.

                                   GST TAX RELIEF FOR HOTELS

Room Tariff	Earlier	New
Up To 1000	Nil	Nil
INR 1000-2500	12%	12%
INR2500-7500	18%	12%
Above INR 7500	28%	18%

​

Hotel Tariffs below Rs. 1,000 GST at Nil rates.

Example:

Room Charge           1000

CGST                               00

SGST                               00

​Hotel Tariffs Rs. 1,000 upto 7,500 GST at 12%.

Example:

Room Charge           1100

CGST   6%                      66       

SGST   6%                      66   

Rooms Charge          1232

Hotel Tariffs above 7500 inr GST at 18%.

Room Charge           7500

CGST   09%                675   

SGST   09%                 675

Rooms Charge          8850

                                                                                                           

                                                         

Sachin Kumar Mishra