TaxTMI 
TaxTMI 
TaxTMI 
The rate of tax for the accommodation services up to 30th Sep ’19 is as below:
Old rate
Transaction value per unit per day | GST (new rate of tax) |
Less than INR 1,000 (per unit) | Nil |
INR 1,000 to INR 2,499 | 12 percent |
INR 2,500 to INR 7,499 | 18 percent |
INR 7,500 and more | 28 percent |
As per the recommendation of the GST Council in its 37th meeting at Goa, the following would be the rate of tax for the accommodation services provided from 1st Oct ’19.
New rate
Transaction value per unit per day | GST (new rate of tax) |
INR 1,000 and less (per unit) | Nil |
INR 1,001 to INR 7,500 | 12 percent |
INR 7,501 and more | 18 percent |
In this regard the following are the guidelines for the suppliers i.e. hotels to identify the rate of tax to be charged (which is in line with section 14 of the CGST Act, 2017) for the accommodation services.
- In case a guest stays at the hotel and checks out on or before 30th Sep ‘19, the service is supplied before the rate change and thereby the rate of tax for the accommodation services provided would be as under.
Table1
S. No. | Issue of invoice | Receipt of payment | Time of supply | Applicable GST rate structure |
1 | After 30th Sep ‘19 | After 30th Sep ‘19 | Receipt of payment or invoice, whichever is earlier | New rate |
2 | On/before 30th Sep ‘19 | After 30th Sep ‘19 | Date of issue of invoice | Old rates |
3 | After 30th Sep ‘19 | On/before 30th Sep ‘19 | Date of payment | Old rates |
- In case a guest checks into the hotel after 30th Sep ‘19, the service is supplied after the rate change and thereby the rate of tax for the accommodation services provided would be as under.
Table 2
S. No. | Issue of invoice | Receipt of payment | Time of supply | Applicable GST rate structure |
4 | On/before 30th Sep ‘19 | After 30th Sep ‘19 | Date of payment | New rates |
5 | On/before 30th Sep ‘19 | On/before 30th Sep ‘19 | Receipt of payment or invoice, whichever is earlier | Old rates |
6 | After 30th Sep ‘19 | On/before 30th Sep ‘19 | Date of issue of invoice | New rates |
- In case if the guest checks in, on or before 30th Sep ’19 and checks out after such date - on reference to section 14 of the CGST Act, it can be seen that the critical aspect to be answered in such a case is whether the service has been supplied before the rate change or not. Whether it can be said that each day is a separate supply of service or whether the entire period of continuous stay by the guest is one supply.
It can be argued that the scope of service to the guest is the period of stay agreed i.e. starting on or before 30th Sep ’19 and ending after such date, in which case the supply of service would be said to be done after 30th Sep ’19 only. Hence the rate of tax as per Table 2 will have to be followed.
However, taking a conservative view in such case, in these kind of situations the hotel could look at treating each day as a separate supply and charge GST as below:
- Charge GST as per Table 1 above for the days the guest stayed before 1st Oct ’19, and
- Charge GST as per Table 2 above for the days the guest stayed on or after 1st Oct ’19.
However, it would be suggested to wait and see if further clarity in this regard is provided in the notification that would be issued effecting this rate change.
For any further queries/comments please write to [email protected].
