GST ON EXTRA BED

[VIPUL JAIN]

Hello Fellow Professionals,

I have a query with respect to GST rate to charged on extra bed :

Example: Room rent charged : Rs. 7000.00 GST rate would be 12%, however due to extra bed provided to guest we have charged Rs. 1000.00, now my question is what would be the GST rate on that extra bed,

will it be 12% considering it to be composite supply? or

will it be 18% considering that actual rent charged is above Rs. 7500.00?

[Amit Agrawal]

There are no two different supplies are involved here. Only one supply of 'Hotel Accommodation' is involved.

Relevant entry No. 7 (i) of Notification No. 11/2017-Central Tax (Rate) (as amended till date) & carrying tax-rate of 12% (i.e. 6% + 6%), reads as follows:

"Supply of ‘hotel accommodation’ having value of supply of a unit of accommodation¹³⁵[****] less than or equal to seven thousand five hundred rupees per unit per day or equivalent."

In given case, value of supply of a unit of accommodation is Rs. 8,000/- (i.e. Rs. 7,000/- plus Rs. 1,000) per day. Hence, tax-rate @ 12% will not apply and applicable tax-rate will be 18%.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

I agree with views of Amit Ji. Here, since the value of supply" of unit of accommodation exceeds Rs. 7,500/- applicable rate will be 18% on entire Rs.8,000/-.

[Shilpi Jain]

Agreed. As per your query, regarding it as a composite supply also the value of supply will be more than 7500 and thereby 18% GST

[KASTURI SETHI]

Dear Sh.Vipul Jain,

Note the word, 'extra' mentioned in the heading of your query itself. This word conveys clear message.

Extras are things which are not necessary in a situation, activity, or object, but which make it more comfortable, useful, or enjoyable. Extra means additional, supplementary etc. Hence it cannot be a composite supply. A composite supply cannot be separated but here 'extra bed' is separatable. Therefore, no concessional rate can be 'enjoyed' in the 'guise' of a composite supply.

 

AI Summary

GST on hotel accommodation: aggregate room charges including extras trigger higher tax rate when threshold is exceeded. The extra-bed charge is to be aggregated with room rent to determine the taxable value of a unit of accommodation; if the combined per-unit per-day value exceeds the statutory threshold for concessional treatment, the concessional GST rate does not apply and the higher GST rate applies to the entire charge.