Sponsored
CA Vinay Lunkad S
Don’t be surprised if you still find a Restaurant bill with 18% GST , plan your travel wisely for room bookings :-
Post the amendments (15th Nov 2017) in the rates for restaurant services by the CBEC this is what is the scenario :-
| Hotel ,guest house , clubs , campsites and Commercials places etc; who provides boarding and lodging services with a room tariff exceeding 7,500 per room for a day | 18% | Input Tax Credit Allowed Hotels etc;
|
| Outdoor Catering services | ||
| All others providing restaurant services whether take away or any other similar arrangements provided by restaurants , eating joints including mess and canteens | 5% | Without any Claim of Input Tax Credit for Hotels etc; |
Kindly be noted :-
- Henceforth there will be no differential tax rates if there is a AC facility in a Hotel or if the Hotel provides liquor, all the restaurant services will be @ 5% except for the above.
- The service recipient cannot claim the GST charged in the bill unless the service recipient is in the similar line of business as the above services comes under ineligible list of services under Input Tax Credit u/s 17 of CGST Act 2017
- Since the reduced rate of 5% (Earlier 18%) comes with a condition that Input tax credit can’t be claimed – it is very likely that Hotels/ restaurants etc; may increase the prices of the food in order to cover up for the loss of Input Tax Credit .
The Input Tax credit to Hotels etc; earlier was in a varied range depending on their scale of operations , to sum up for any Hotel, restaurants , having any input tax credit :-
| More than 13% | Loss to Hotels etc |
| Less than 13% | Profit to Hotels etc |
| 13 % | Neutral – No Profit no loss |
- Further under CGST Act 2017 there is a specific provision (S-171) wherein if there is an reduction in price and the benefit of the same is not transferred the Anti-Profiteering Committee of GST may call for the assessment and question the reasons for non-reduction of prices
Following is the GST rates for Room stays or such similar stays:-
| Room Tariff Per day ( Excluding any discounts) | ||
| Upto Rs.999/- | – | |
| Rs.1,000 to 2,499/- | 12% | Input Tax Credit Allowed for Hotels |
| Rs.2,500 to 7,499/- | 18% | |
| 7,500/-& above | 28% |
Sponsored
Kindly Refer to
Privacy Policy &
Complete Terms of Use and Disclaimer.
Author Bio
Yes u can charge 5 percent
But reversal of previous itc not possible.
Plz free to contact
Mob-7838931927
We are in restaurant business as well as with Hotel business, We are collection 18% on restaurant and in Hotel as per tariff rate 12%, 18% and 28% with full ITC.
Can we charge 5% on Restaurant with reversal of corespondent ITC ??
Good one Vinay