GST slabs for different hotels
Posted on: 14/Jul/2017 9:57:00 AM
The central government department of direct taxation has given a detailed explanation regarding the GST slabs for the hotels and restaurants.
Before GST
The Department of direct taxation informed that a GST slab of 12% or 18% will be collected in hotels for different food items served. This GST includes both the central and the state GST.
Before GST, Service Tax, service charges and VAT were collected. VAT is charged on the food items. Service Tax is for providing and serving food. This service charge is not to be paid to the government – this is the payment charged by the respective hotels. As per the government rules, the service charge is not compulsory.
After GST
Non-air-conditioned hotels (with no supply of alcoholic beverages) – 12%
Air-conditioned hotels with provision to supply alcoholic beverages or without provision for this – 18%.
Non-air-conditioned hotels, but with provision to supply alcoholic beverages – 18%
Hotels with an annual business of up to Rs. 75 Lakhs – 5%
While eating food in hotels with provision to supply alcoholic beverages, the GST is only for the food items, Alcoholic beverages will come under the VAT structure.
Before the implementation of the GST, there was no provision for deducting the taxes for the various ingredients purchased for the preparation of the food items. However, this provision is available after GST. So, the hotels/restaurants can reclaim the taxes paid by them while procuring the ingredient food items. So, the hotel/restaurant owners are in a position to reduce the price of the food items.
