The GST (Goods and Services Tax) Council announced the GST on hotels and the GST on restaurants after the GST was implemented. The GST Council in India oversees determining the GST rates for all commodities and services and clearly stating the compliance requirements. The employees understand that it’s their duty is to ensure compliance. The GST Council, which is made up of representatives from both the central and state governments, is responsible for overseeing all areas of GST implementation and administration in India.
The GST registration procedure has begun, and the GST Portal is now accessible for use by taxpayers, with GST slated to be implemented in India on July 1, 2017. Let’s have a look at the gst paidand impact of GST for hotels and restaurants in India in this article.
Old vs New
Hotels and restaurants were required to comply with VAT, service tax, and luxury tax under the VAT, service tax, and luxury tax regimes. For the hotel and restaurant industry, the tax structure has added a great deal of complication. Hotels and restaurants would only have to comply with the tax system if they were subject to GST.
The SAC or HSN Code
All tax invoices issued under GST include an HSN Code or SAC code, which is the services accounting code, for the products or services provided. The HSN code must be mentioned in the case of goods and all parties must maintain compliance. HSN, or Harmonised System Nomenclature, is an international system for identifying items in international trade that is used in over 200 nations.
GST Rate for Hotels
Hotels and restaurants would be required to use the SAC Code, which was formerly used by the Service Tax Department. Because most hotels and restaurants were previously subject to service tax, the transition to GST on Hotel Business would be much easier. The Hotel GST Bill depends on a variety of factors.
The GST rate that applies to hotels, inns, guest houses, clubs, campgrounds, and other places where people stay for a short period of time is determined by the kind of facility, ratings, and room rent charged for a day. All the declared tariffs are stated below.
Talking about GST on hotel rooms, inns, or guest houses, you will be charged 12% GST. In addition, the same GST rate would apply to clubs, campsites, and other commercial locations used for residential or lodging purposes with room tariffs of Rs.1000 or more per room per day but less than Rs.2500.
When renting hotels, inns, guest homes, clubs, campgrounds, or other commercial venues for residential or lodging purposes where the room rate is between Rs.2500 and Rs.5000 per room, per day, the GST paid should be 18%.
Accommodation at hotels, inns, guest homes, clubs, campgrounds, or other commercial places meant for residential or lodging purposes, where room rent ranges from Rs.5000 and higher per night per room, is subject to a 28 percent GST rate.
GST Rate for Restaurants
The GST rate for restaurants would vary depending on the sort of air-conditioning systems offered. The tax rate will be different based on the availability of alcohol and other supporting services.
The GST rate of 5% tax paid applies to the supply of food and beverages in a restaurant that does not have air conditioning or central heating at any time of the year and does not have a liquor licence.
The taxable value of food/drinks supplied in a restaurant with air conditioning or central heating at any time during the year is subject to an 18 percent GST rate.
The supply of food/drinks at a restaurant with a liquor licence is subject to an 18 percent GST charge.
The supply of food/drinks in an air-conditioned restaurant in a 5-star or higher-rated hotel restaurant is subject to a 28 percent GST rate.
GST Rate for Public Gatherings and Outdoor Catering
The 18 percent GST rate applies to bundled services that include the delivery of food or any other article for human consumption, as well as the rental of such premises (including a hotel, conference centre, club, pandal, shamiana, or any other venue expressly designed for arranging a gathering). In India, the supply of food/drinks in outdoor catering is subject to an 18 percent GST rate.