11th November 2017
All Members,
Dear Colleagues,
Sub: Updates on GST Council Meeting held on 10th November 2017
As you may be aware, 23rd meeting of GST Council was held in Guwahati yesterday. The GST Council has recommended some relief in GST Rates in certain goods and services which including tourism and hospitality industry also. The changes which have been made for tourism and hospitality industry include the following:-
1. All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5% GST without ITC.
2. Restaurants in Hotel premises having room tariff less than Rs. 7500 per unit per day will attract GST of 5% without ITC. However, for the restaurants 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. This means if rack rate of any category of one room (even suite room) in the hotel is Rs. 7500 or above, 18% GST would be applicable in the restaurant.
3. Our demand of exempting protected monuments has been accepted and there will be no GST either for the tickets purchased directly or through sub agent. Also it will not be applicable even if GST under RCM becomes applicable from 1st April 2018 on the entrance ticket for the “Protected Monuments”.
4. Please note there is no change in GST rate for room tariff and it remain unchanged.
Following our demands have been forward to the Select Committee of GST Council for consideration:-
i) A deemed value equal to 10% of total bill amount charged by the tour operator as markup/value addition, may be fixed on the same lines as in case of air travel agents under rule 32(3) of CGST Rules, 2017. This provision determining the taxable value of services provided by the tour operators will meet the ends of justice facilitating the service provider to pay GST at the rate of 18% on 10% deemed value, making the effective rate of 1.8% of the gross billing (without ITC).
ii) In case the Government do not agree to the solution suggested above, the Association prays that like transporters and rent-a-cab operators, limited ITC in respect of GST charged by a tour operator may be made available to another tour operator availing services from former tour operator in the same line of business.
Hope our above two requests will be considered favourably by the Select Committee.
We shall keep you update immediately as soon as we get any outcome.
With best regards,
Pronab Sarkar