Introduction
The implementation of Goods and Services Tax (GST) has brought about significant changes in taxation across various sectors, particularly impacting the hospitality industry. As businesses in this sector grapple with the intricacies of GST, seeking clarifications becomes paramount. This comprehensive guide aims to address key questions and provide insights to help navigate the nuances of GST in the hospitality sector.
Understanding GST on Accommodation Services
1. Will GST be charged on actual tariff or declared tariff for accommodation services?
GST will be payable on the actual amount charged (transaction value), not the declared tariff. This ensures taxation based on the real amount received from the customer.
2. What will be GST rate if cost goes up (more than declared tariff) owing to an additional bed?
The GST rate is determined according to the declared tariff for the room, and the applicable rate is levied on the entire amount charged. For instance, if the declared tariff is Rs. 7000 per day, but an extra bed costs Rs. 8000, GST will be charged at 18% on Rs. 8000.
3. Where will the declared tariff be published?
The declared tariff, whether on websites, tariff cards, or at the reception, will be considered. In case of different tariffs in various places, the highest declared tariff will be used for GST calculation.
4. Dynamic pricing: Same room may have different tariff at different times. Which rate to be used?
If different tariffs exist for different seasons, the tariff applicable during the season of accommodation will be considered.
5. If tariff changes between booking and actual usage, which rate will be used?
The declared tariff at the time of supply will be applied.
6. GST at what rate would be levied if an upgrade is provided at a lower rate?
GST will be applied on the actual amount charged for the upgraded service. For example, if the declared tariff is Rs. 10,000, but the amount charged is Rs. 7,000, GST will be levied at 28% on Rs. 7,000.
Navigating the Casino Dilemma
Understanding the GST implications on casino services becomes crucial, especially with the complexities involved.
1. What is the GST rate for admission into a casino?
As per notification No. 11/2017-Central Tax (Rate), the GST rate for admission into a casino is 28%. Both entry to casinos and gambling services are subject to this rate on the total bet value.
2. Clarification needed on horse racing GST base:
GST will be levied on the entire bet value for horse racing, i.e., the total of face value of bets paid into the totalisator or placed with licensed bookmakers.
Deciphering GST on Specific Scenarios
1. Does price/declared tariff include the tax component for cinema admission and hotel accommodation?
The price/declared tariff does not include taxes; GST will be levied on the actual amount charged.
2. Is rent on rooms provided to inpatients exempt from GST?
Yes, room rent in hospitals is exempt from GST.
3. What is the GST rate for bakery items supplied where eating place is attached?
Bakery items supplied in conjunction with food or drinks fall under section 10 (1) (b) of the CGST Act, qualifying for a 5% GST rate under composition levy.
Understanding Registration Exemptions
1. Are homestays below the threshold exempt from registration when providing accommodation through an Electronic Commerce Operator (ECO)?
Homestays below the turnover threshold are exempt from registration, even when providing services through an ECO.
Determining the Nature of Supply
1. Is the supply of books considered as a supply of goods or services in specific scenarios?
The supply of books is treated as a supply of goods as long as the supplier owns the books and has the legal rights to sell them on their own account.
Clarifying GST on Legal Services
1. Are legal services, other than representational services, provided by an individual advocate or senior advocate to a business entity liable for GST under the reverse charge mechanism?
Yes, under the reverse charge mechanism, GST is payable by the recipient (business entity) for legal services, including representational services, provided by an individual or senior advocate.
Conclusion
In the ever-evolving landscape of GST, seeking clarifications on specific scenarios is imperative for businesses, especially in the hospitality sector. This comprehensive guide aims to shed light on key questions and provide clarity on navigating the complexities of GST, empowering businesses to comply with the regulations effectively. As the GST framework continues to evolve, staying informed is crucial for seamless operations and compliance in the dynamic hospitality industry.
