Fin Min clarifies 5-star accommodations to attract 18% GST

The Dollar Business Bureau

Hotels especially 5-star rated ones will attract a GST of 18% for room tariffs of less than Rs.7,500, a government release told PTI sources. As per the rate structure decided by the GST Council, hotels, clubs having room tariff of Rs.1,000 and above but less than Rs.2,500 per room per day will attract 12% tax. In cases where the room tariff is Rs.2,500 and above but less than Rs.7,500 per room per day, an 18% GST would be charged.

The finance ministry said in a statement that it is clarifying the doubts that it has received wherein it was expressed 'whether 5-star hotels are liable to pay GST at 28% irrespective of the declared tariff of a unit of accommodation.' Issuing a statement on the same, the ministry said, '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 Rs.7,500 per unit per day, will attract GST at 18%. Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST.' The Goods and Services Tax (GST) has been implemented from July 1.