2019 GST Rate on Hotels and Restaurants
2019 GST Rate on Hotels and Restaurants
On 30th September 2019, the Ministry of Finance (MoF) has notified the revised GST for hotel accommodation, restaurant services, food and beverages served by Indian Railways or India Railways Catering and Tourism Corporation Ltd and for many others through Notification No.20/2019. The revision was carried out on the original notification No.11/2017 (Central Tax Rate) released on 28th June 2017. The revised notification was The notification was exercised through the following sections of the Central Goods and Services Tax Act, 2017:
- Section 9, sub-sections (1),(3) and (4)
- sub-section (1) of Section 11
- sub-section (5) of Section 15
- sub-section (1) of Section 16 and
- Section 148
The notification was focused on revisions for the following sectors as specified by the Central Goods and Services Tax Act, 2017.
- Hotel Accommodation
- Restaurant Services
- Food and beverage services at Indian Railways or Indian Railways Catering and Tourism
- Outdoor Catering
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Hotel Accommodation
The notification states that any business associated with hotel accommodation, inns, guest houses, clubs and other commercial residential places having a tariff of more than Rs.1000 but less than or equal to Rs.7500 per unit shall pay 6%. The 2017 notification had provisioned for 2.5% tax for having a tariff of more than Rs.1000 but less than or equal to Rs.2500 per unit. The 2019 notification has increased the tariff rate slab to decrease the tax per cent.
Restaurant Services
Any business involved with the supply of serving food or beverages in exchange for cash through a restaurant, canteen, food joint or mess, which also can be located in the premises of hotel, clubs, companies, inns, or other commercial places shall pay 2.5%. The tax rate applies only if the credit of the input tax is not considered while supplying the service.
Food Service at India Railways Catering and Tourism or Indian Railways
Apart from the transport services, Indian Railways governed by the Central Government also provide mobile catering and static catering services. The supply of goods and services is charged based on the GST specified tax rates. The government several tax rates for the goods and services for the Indian railways. However, it later implemented 5% GST for all goods and services to avoid confusions.
To further decrease the tax on the goods and services by Indian Railways, the MoF implemented with 2.5% central tax rate to all food or beverages severed in trains or at platforms. However, the tax rate applies only if the credit of the input tax is not considered while supplying the service.
Outdoor Catering
Other than Specified Premises
To attract 2.5% GST:
- The outdoor catering services should be operating at the premises
- Services should not be provided by other members such as at hotel accommodation at specific premises or suppliers located at specific premises
- The tax rate applies only if the credit of the input tax is not considered while supplying the service
Outdoor Catering with Renting Premises
To attract 2.5% GST:
- Providing catering services together along with renting the place
- Renting places includes convention centres, club, pandal, hotel, shamiana or other places specially arranged for the event
- Services should not be provided by other members such as at hotel accommodation at specific premises or suppliers located at specific premises
- The tax rate applies only if the credit of the input tax is not considered while supplying the service
- Special premises relate to areas providing ‘hotel accommodation’ charing more than Rs.7500 per unit or equivalent
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Explanations
The central tax rate shall be applied as prescribed in the Notification No.20/2019 and shall not be levied for the above-said sectors. The tax for ‘hotel accommodation’ shall also be applied for tariff more than Rs.7500 per unit or equivalent. The relevant notification No.20/2019 is reproduced below for quick reference:
GST Notification No.20For GST services, income tax filings or starting business, click here
