Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It has replaced multiple taxes and has simplified the taxation system. When it comes to the hospitality industry in India, GST is applicable, and the tax rates vary based on the nature of services provided. Here's an overview of the GST applicability and tax rates on different aspects of the hospitality sector:
1. Accommodation Services :
- Hotels : The GST rate for hotel accommodation services varies depending on the room tariff per night. There are four categories:
- GST Rate of 0% : For rooms with a tariff of up to ₹1,000 per night.
- GST Rate of 12% : For rooms with a tariff between ₹1,001 and ₹7,499 per night.
- GST Rate of 18% : For rooms with a tariff between ₹7,500 and ₹12,499 per night.
- GST Rate of 28% : For rooms with a tariff of ₹12,500 or more per night.
- Homestays and Lodges : Similar to hotels, the GST rates for homestays and lodges are also based on room tariffs as mentioned above.
2. Food and Beverage Services :
- Restaurants : The GST rate for restaurants is generally 5%. However, restaurants that are part of hotels with room tariffs above ₹7,499 per night are charged at 18%. Restaurants without air conditioning and those that do not serve alcohol are taxed at 5%.
- Catering Services : Catering services, including outdoor catering, are generally taxed at 5%. However, if the catering service includes the supply of alcoholic beverages, it falls under the 18% GST category.
3. Banquet Halls and Event Services :
- Banquet Halls : The GST rate for renting banquet halls or event venues is 18%.
4. Travel Services :
- Travel Agents : Services provided by travel agents, tour operators, or travel booking platforms are typically taxed at 5%. This includes commission earned by travel agents for booking hotels, flights, and other travel-related services.
5. Spa and Wellness Services :
- Spas and Wellness Centers : Services provided by spas and wellness centers are taxed at 18%.
6. Club Memberships :
- Club Memberships : The GST rate for club memberships can vary based on the services offered by the club. It can range from 18% to 28%.
It's essential for businesses in the hospitality industry to comply with GST regulations, including timely filing of GST returns and maintaining proper records of transactions. Additionally, it's crucial to keep abreast of any changes in GST rates or regulations as they may evolve over time.
In summary, GST is applicable to various services in the hospitality sector, including accommodation, food and beverage, event services, travel, wellness, and club memberships. The tax rates vary depending on the type of service provided and the associated price points. Businesses in this sector should ensure they understand the applicable GST rates and comply with the GST laws to avoid legal and financial issues.
Created & Posted by Navneet
Accountant at TAXAJ
TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are:
Launch Your Start-Up Company/Business,
Trademark & Brand Registration,
Digital Marketing,
E-Stamp Paper Online,
Closure of Business,
Legal Services,
Payroll Services, etc. For any further queries related to this or anything else visit
TAXAJ
TAXAJ Corporate Services LLP
Address: 1/11, 1st Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078