Hotel Services GST Rates Clarified by Advance Ruling Authority

The Advance Ruling Authority determined the GST rates for various services offered by a hotel, including room stay, restaurant services, and additional amenities. GST rates were specified based on the declared room tariff, with different rates applying to services such as room stay, food and beverage services, and transportation services. The ruling clarified that services must be taxed individually according to their nature and the applicable GST rates outlined in Notification No. 11/2017-Central Tax (Rate).

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Issues Involved:
1. Determination of GST rate for various services offered by the hotel.
2. GST applicability on restaurant services based on room tariff.
3. GST liability on a package of services exceeding Rs. 7,500.
4. GST rate on restaurant services when room tariff is below Rs. 7,500.
5. GST rate fluctuation based on seasonal room tariff changes.
6. GST on lower category rooms including breakfast.

Detailed Analysis:

Issue 1: Determination of GST Rate for Various Services Offered by the Hotel
The hotel provides multiple services such as room stay, service charge, breakfast, airport pick-up and drop, extra bed, laundry services, lunch/dinner, and heritage walk. The invoice reflects separate charges for each service. These services are not naturally bundled and do not constitute a composite supply. Therefore, GST rates for each service must be determined individually as per Notification No. 11/2017-Central Tax (Rate).

Ruling:
- Room Stay and Service Charge: GST rate is determined by the declared tariff:
- Up to Rs. 999: GST @ NIL
- Rs. 1,000 to Rs. 2,499: GST @ 12%
- Rs. 2,500 to Rs. 7,499: GST @ 18%
- Rs. 7,500 and above: GST @ 28%
- Food and Beverage Services by Restaurants in Hotel Premises:
- Room tariff less than Rs. 7,500: GST @ 5% without ITC.
- Room tariff Rs. 7,500 and above: GST @ 18% with ITC.
- Airport Pickup and Drop: Taxable under 'Passenger transport services' with GST @ 18%.
- Laundry and Heritage Walk: Taxable under 'Other services n.e.c.' with GST @ 18%.

Issue 2: GST Applicability on Restaurant Services Based on Room Tariff
If the declared room tariff is less than Rs. 7,500, the restaurant services provided to both hotel guests and outsiders will attract GST @ 5% without ITC. If the declared room tariff is Rs. 7,500 or above, GST @ 18% with ITC applies.

Ruling:
- Room tariff less than Rs. 7,500: GST @ 5% on restaurant services.
- Room tariff Rs. 7,500 and above: GST @ 18% on restaurant services.

Issue 3: GST Liability on a Package of Services Exceeding Rs. 7,500
If a package is offered to a guest covering multiple services and the sum total exceeds Rs. 7,500, the declared tariff is used for determining the GST rate. Each service is taxed individually based on its nature.

Ruling:
- Room Stay and Service Charge: GST @ 28% if declared tariff is Rs. 7,500 and above.
- Restaurant Services (e.g., breakfast): GST @ 18%.
- Airport Pickup and Drop: GST @ 18%.

Issue 4: GST Rate on Restaurant Services When Room Tariff is Below Rs. 7,500
If the declared room tariff is less than Rs. 7,500, the restaurant services provided to both hotel guests and outsiders will attract GST @ 5% without ITC.

Ruling:
- Room tariff less than Rs. 7,500: GST @ 5% on restaurant services.

Issue 5: GST Rate Fluctuation Based on Seasonal Room Tariff Changes
The GST rate for restaurant services is determined based on the declared tariff for the season in which the service is provided. If the room tariff exceeds Rs. 7,500 during peak season, GST @ 18% applies to restaurant services. When the tariff falls below Rs. 7,500, GST @ 5% applies.

Ruling:
- Peak Season (tariff exceeds Rs. 7,500): GST @ 18% on restaurant services.
- Low Season (tariff below Rs. 7,500): GST @ 5% on restaurant services.

Issue 6: GST on Lower Category Rooms Including Breakfast
For lower category rooms sold at Rs. 3,400 (including breakfast), the highest declared tariff is considered for GST purposes. If the declared tariff is Rs. 7,500 and above, GST @ 28% applies to the room charge including breakfast.

Ruling:
- Room tariff Rs. 3,400 (including breakfast): GST @ 28% if the highest declared tariff is Rs. 7,500 and above.

Conclusion
The Advance Ruling Authority provided a comprehensive analysis of the GST applicability on various services offered by the hotel. Each service is taxed based on its nature and the declared room tariff, ensuring compliance with the GST Act and relevant notifications.

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