GST on Accommodation Services

Analysis of GST on Accommodation Services in India

Is there any GST on Accommodation Services / Guest House / Hostel Services?

yes .

Accommodation Services falls under Service Accounting code 99631

 996311 : Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like

 996312 : Camp site services

 996313 : Recreational and vacation camp services

Other accommodation services falls under Service Accounting code 99632

 996321 : Room or unit accommodation services for students in student residences

996322 : Room or unit accommodation services provided by Hostels, Camps, Paying Guest and the like

996329 : Other room or unit accommodation services nowhere else classified

What is the GST rates on Accommodation Services ?

GST Rates on Accommodation Services are based on “ Declared Tariff”

“declared tariff‘ includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit; [ Clause 2(w)]

 Example : If declared tariff o f room is Rs 1000 per month and Hostel provide it after discount at Rs 900  per month then GST rates will be based on Declared Tariif of Rs 1000

i) No GST / Exemption from GST to the following Services [ Heading 9963] :-

Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below Rs 1000 per day or equivalent.

[As per Sr No 14 of Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

ii) CGST Rate 6% & SGST Rate 6% / IGST Rate 12% for following Services :-

“ Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of Rs 1000 and above but less Rs 2500 per unit per day or equivalent.

Explanation.—“Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

[As per Sr No 7(ii) of Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017  ]

iii) CGST Rate 9% & SGST Rate 9% / IGST Rate 18% for following Services : –

“ Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of Rs 2500 and above but less Rs 7500 per unit per day or equivalent.

Explanation.—“Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

[As per Sr No 7(vi) of Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017  ]

iv) CGST Rate 14% & SGST Rate 14% / IGST Rate 28% for following Services : –

“ Accommodation in hotels including five star hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of Rs 7500 and above per unit per day or equivalent.

Explanation.—“Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

[As per Sr No 7(viii) of Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

Note :  Govt Clarification by Press Release 18.07.2017 : Reports have been received expressing doubts whether 5-star Hotels are liable to pay GST @ 28% irrespective of the declared tariff of a unit of accommodation.

It is hereby clarified that accommodation in any hotel, including 5-star hotels, having a declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will attract GST @ 18%. Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST.

Who is Liable to pay if Accommodation Services are provided through e commerce websites  ?

E.g (Hotel Room Booking through websites etc )

[ As per Notification No 17/2017 Central Tax (Rate) Dated 28th June 2017  ] 

Tax on intra-State supplies shall be paid by the electronic commerce operator in case of

….

ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act;

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