The Goods and Services (GST) on hotel room rent in India is a crucial aspect of the hospitality industry. It’s crucial to understand the involved entities and applicable rates so that consumers can navigate the sector with information.
Let’s see how the GST registration for hotel room taxes works.
The Breakdown of Rates of Hotel Industry
This is an overview of the Three GST Rate Tiers for Hotel Accommodation in India:
Current Structure:
12% GST applies to rooms priced under ₹1,000 per night.
18% GST is charged for rooms priced between ₹1,000 and ₹7,500 per night.
28% GST is levied on 5-star hotels and rooms exceeding ₹7,500 per night.
Impact on Travelers:
These GST rates significantly influence the final bill for guests, affecting their overall travel expenses.
Importance of Room Tariff Transparency:
Hotels need to disclose the room tariff upfront, including the GST rate on hotel rooms, to avoid any hidden charges that could surprise guests.
Hotel Rooms That Have a Tariff of Less Than 2500 INR per Day
For hotel rooms with a tariff of less than 2500 INR per day, a concessional GST rate is applicable. Such a lower rate is the tks support the budget accommodations making these rooms more accessible to a broader section of travellers.
Hotel Rooms That Have a Tariff of Less Than 5000 INR per Day
Also, hotels that have tariffs for their rooms below 5000 INR are now privy to a new GST registration rate. This type of tiered approach makes taxation flexible allowing mid-range hotels to benefit and provide more affordable accommodation options and details on GST return filing.
Process of GST Registration in Hotel Room
GST registration for hotel rooms involves several steps.
- First, businesses must obtain a PAN and register on the GST portal.
- Next, fill out Form GST REG-01 with required details like business name, address, and bank account information.
- Apply along with necessary documents, such as identity proof and business registration certificates.
- Once verified, a unique GSTIN is issued.
Timely registration is crucial to ensure compliance and avoid penalties, enabling hotels to charge and collect GST effectively.
Additional Services and Their Implication on GST Rate on Hotel Rooms
Here are some services that you can find as complimentary in the hotel rooms:
- Restaurant Services: Highlight the 5% and 18% separate GST rates applicable.
- Amenities and Activities: Specify if they are a part of the room tariff or have separate charges and the corresponding GST rates.
- Cancellation Fees and Miscellaneous Charges: Clarify the GST applicable to cancellation fees, extra bed charges, and similar services, using the relevant SAC codes.
Conclusion
Understanding GST rates and GST return filing on hotel room rentals is vital for both consumers and businesses in India. The tiered rates impact pricing and transparency within the hospitality industry, ensuring fair practices.
For detailed guidance on tax filings and registration processes, visit E Startup India. Stay compliant and informed to navigate the complexities of GST effectively!
Moreover, If you want any other guidance relating to GST Registration online, please feel free to talk to our business advisors at 8881-069-069.
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