Applying GST rate on Actual Tariff – HRAWI

“This is a welcome move and the HRAWI thanks the Government for considering our request. The Association’s consistent engagement with the Govt and GST Council has finally yielded results. Applying GST rate on Declared Tariff was incorrect and caused confusion for guests. We greatly appreciate the move and thank the GST Council for bringing about the much-needed reform,” says Mr. Dilip Datwani, President, Hotel, and Restaurant Association of Western India (HRAWI)

GST applicable on room tariffs created much confusion for the hotel industry and its guests. The GST was mandated to be levied on the Published tariffs or the Declared tariffs on hotel rooms. However, hotels are known to offer discounts on room tariffs to patrons which alter the Declared rates and which could correspond to a different GST rate as per the prescribed rate slabs on room tariffs. Hence the HRAWI had appealed for the rate categorization for hotels to be done basis the Transaction value or Actual value rather than on the Declared tariff.

So for instance, if declared tariff on a room stay is Rs.8000/- and the stay is charged at Rs.5000/-, hotels are required to levy a GST of 28 percent instead of 18 percent. This is unfair and it increases the tax burden drastically. Hence we had suggested that the customer is levied a GST based on the Actual tariff to avoid any ambiguities in interpretation and disputes.

18 percent GST is applicable for room tariffs ranging between Rs.2500 and Rs.7500 and tariffs of Rs.7500 and above attract 28 percent GST.

The Indian Hotels Company Limited (IHCL) empowers women weavers of Varanasi

Singapore welcomes 6.1 lakh visitors from India between Jan-May 2018

Comments

0