In Independence Day speech from Red Fort, PM Narendra Modi urged people to visit 15 domestic tourist destinations in India by 2022 to promote tourism.
India was ranked 34th in the Travel & Tourism Competitiveness Report 2019 published by the World Economic Forum.
Total contribution by the travel and tourism sector to India’s GDP is expected to increase from Rs 15,24,000 crore in 2017 to Rs 32,05,000 crore in 2028.
According to WTTC, India ranked 3rd among 185 countries in terms of travel & tourism’s total contribution to GDP in 2018.
As of 2017-18, 81.1 million people are employed in the tourism sector in India which was 12.38 percent of total employment in the country. The Government of India has set a target of 20 million foreign tourist arrivals (FTAs) by 2020 and double the foreign exchange earnings as well.
The Government of India is working to achieve one percent share in the world's international tourist arrivals by 2020 and two percent share by 2025.
In the hotel and tourism sector, 100 percent FDI is allowed through the automatic route.
A five-year tax holiday has been offered for 2, 3- and 4-star category hotels located around UNESCO World Heritage sites (except Delhi and Mumbai).
We all come across one day or another with the billing counter of a Hotel or a Restaurants.
We all go on holiday.
From Makki di Roti & Sarson da saag of Punjab, Dhokla of Gujrat, Rogan Josh of Kashmir, Papaya Khar in Assam, Biryani of Telangana, Appam of Kerala, Bhutte ka kees in Madhya Pradesh ,Dal bati Churma of Rajasthan and Bajre ki Khichdi in Haryana we Indians love to eat at Restaurants and cafes.
But when we stand on the billing counter and have to pay our bills, we all have a habit to look over the bill and the rate of tax charged by the restaurant but do we really check the rate??
Because to check the Rate of Tax charged by your restaurant, you should have a prior Knowledge of Tax rates applicable on your Restaurants or Hotels.
We actually take a look, but after reading this article I am dam sure, you will be checking the rate but not just look over the rate and also will be telling your mates about the rate of Tax your hotel should charge on your bills.
Picture before GST
In the previous regime, a hotel with room tariffs exceeding Rs. 1,000 would be liable to pay 15 percent service tax. A deduction of 40% allowed on the tariff value would bring the effective rate of service tax down to 9%, but its effect was negligible since the VAT and luxury tax would still apply.
GST Rates
RATE OF GST ON Hotel Room Tariff
RATE OF GST before 1st October 2019 – Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes: -
RATE OF GST after 1st October 2019– Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes: -
RATE OF GST ON FOOD & BEVERAGES SALE
All stand-alone restaurants irrespective of air-conditioned or otherwise will attract 5% without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
Food Supplied by Indian Railways or Indian Railways Catering and Tourism Corporation ltd whether in trains or platforms will attract 5% GST without ITC.
Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without ITC.
Outdoor catering at premises where room tariff is less than Rs 7500 per unit per day will attract GST of 5% without ITC.
Restaurants in hotel premises or Outdoor catering in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC.
Before 1st October 2019, the concept of Declared Tariff and the Value of Actual supply lead a lot of confusion in the industry but GST council through its circular dated 26th July 2018 (No: 13/2018) amended the word “value of Supply” instead of “Declared tariff” which was welcomed by the industry.
The hotel industry has always been the favorite industry of the Govt of India since July 1, 2017 (Day GST was introduced to the nation). GST council also erased the rate of 18% from the picture of the hotel industry by its circular dated 30th September 2019 (NO: 20/2019) which was applicable from 1st October 2019.
After 1st October 2019 If the hotel tariff charged by the hotel is between 1000Rs-7500Rs, GST will be levied @12% on the value of supply. However, before the 1st October, 2019 Hotel tariff charged by the hotel is 2600 per day per room then GST was levied @18%.
So this relaxation was also welcomed by the industry.
So I think it is the best time to plan a trip to Kerala or Manali, Pay less for your room tariffs and I am sure this time you are going to CHECK the rate of GST on your hotel bills even when you are drunk.
Have a Happy Reading Readers. I hope the rest of your day would be the best day of yours.
This article is based on the amendments made as on 29th December 2019.
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