Taxability -SEZ

[VIGNESH]

Sir.Accomodation service Provided by a hotel to staffs of SEZ unit are taxed IGST but the rate of tax depends on the room tariff or @ 18%, without reference to the tariff rates?

[KASTURI SETHI]

Up to 27.7.2018, GST rates on accommodation services were based on declared tariff. Thereafter, GST Rates are based on the value of supply.

Accommodation services by a hotel to SEZ unit is ZERO rated.

[VIGNESH]

Guruji. Here the service was not against LUT!

[KASTURI SETHI]

You always write 'GURU Ji'. No objection. But I think the word, 'Sir' is sufficient. Isn't it ?

O.K. You can pay IGST and get refund. What is the actual hurdle in this scenario ? Pl. elaborate.

[VIGNESH]

Kindly allow me to use Guruji. My Query is with respect to Tax rate! when it comes to SEZ is it taxed @ 18% irrespective of value of supply or tax rates on value of supply? that is room below 7500Rs- 12%, above 7500 -18%.

[Shilpi Jain]

The tax rate is not specific to service recipient.

It is based on the room charges. if more than 7500 then 18% else 12%

[VIGNESH]

Thank u mdm

AI Summary

Accommodation service tax treatment for SEZ supplies: zero-rating and GST rate determined by room tariff rather than recipient. Accommodation services to an SEZ unit are zero rated; GST rate determination shifted from declared tariff to value of supply, while practical handling where LUT is not used may involve paying IGST and claiming refund. The applicable tax classification for accommodation is determined by room charges rather than by the service recipient, with differential rates tied to room charge slabs.