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of <h1>Expenditure-tax Act: Hotels with room charges over Rs. 1,200/day, including taxes, are liable u/s 2(10).</h1> The Expenditure-tax Act, 1987 applies to chargeable expenditures in hotels where room charges are Rs. 1,200 or more per day per individual. Previously, the threshold was Rs. 400 per day. The Board clarified that luxury tax and other state-imposed taxes should be included in the computation of room charges under section 2(10) of the Act. For instance, if a hotel charges Rs. 1,150 per day plus a 7% luxury tax, the total room charges exceed Rs. 1,200, making the hotel liable for the Expenditure-tax. However, luxury tax is not considered part of the chargeable expenditure under section 5.
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