Important news for everyone as you will need to pay more taxes now. The new hotel restaurant faces an 18% GST rule that is now applicable if the room rent crosses ₹7,500 per day.
Understanding the new Hotel Restaurant Face 18% GST Over ₹7.5K Tariff Rule
As per the CBIC, if a hotel room tariff is above Rs. 7500 per night, then the hotel must collect 18% GST from the customer. This rule applies regardless of the discounts given. Furthermore, it includes hotels, guest houses, inns, clubs, and other accommodations that offer room services.
It is important to note that the tax is not based on the final price paid but on the declared tariff of the room. That means even if the room you book with Rs. 8000 tariff for Rs. 7000 after applying a discount, you will still fall under the Hotel Restaurant Face 18% GST rule.
Why is it important to understand Hotel Restaurant Face 18% GST rule?
Hotels and other businesses in the same industry now need to update their tax collection practices and ensure proper GST Return Filing. They must now update their taxation practices and make accurate GST Returns to collect the tax required as per rules and avoid penalties and legal issues.
Impact on Customers and Businesses
Customers booking high-end rooms will now see increased costs due to this 18% tax. Furthermore, businesses must now keep their systems updated and be transparent about tariffs. In order to avoid any confusions, businesses must communicate the accurate pricing.
Conclusion
The clarification from CBIC is bringing uniformity and preventing tax evasion. However, it is leading to higher costs for premium stays. But, it is also simplifying the process for the government and businesses to collect and report taxes properly.
Moreover, If you want any other guidance relating to GST Registration, GST Return Filing or GST Updates, please feel free to talk to our business advisors at 8881-069-069.
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