SHORT TERM ACCOMODATION

[sunil mehta]

A service provider (Hotel ) provides accomodation services to its customers .Hotel has fixed its room tariff for some rooms @Rs.1000/- and above and for few rooms below Rs.1000/-.Suitable exemption has been given vide Notification 31/2011-ST  dt. 25/04/11.TRU circular no.3345/3/2011 dt.25/4/11 has clarified that "declared tariff" has been defined in the notfn. and it will include all amenities,facilities etc provided in the unit of accomodation. But the circular says that cost of bed will not form part of 'declared tariff'  The bill issued to customer shows (i) regular room tariff ,----Rs.1100/-

(ii)cost of extra bed (ii)Rs.300/- (iii) cost of meals/breakfast  Rs.500/- (iv) laundary chgs. Rs.100/-

Query:-1)What is the amount of services are taxable?

2)Whether cost of extra bed Rs.300/- will form part of taxable services ?i.e taxable value of the bill will be Rs.1400(1100+300) or Rs.1100/-?Since amt. recd. on account of "extra bed" is in relation to 'Room Tariff' value whether it will be legally advisable to include such valu for purpose of levying service tax?

3)Whether laundary chgs. Rs.100/- will be included ?

AI Summary

Short term accommodation tax: extra bed and included amenities form part of taxable accommodation value, separate food/laundry excluded.
Short term accommodation is taxable for stays under three months where the declared tariff (including unit amenities) meets the notification threshold; tax applies to the actual amount charged. Charges for extra beds form part of the accommodation service value and are included in the taxable base (subject to applicable abatement). Separately billed food and laundry charges are excluded from the declared tariff and thus not taxed as accommodation, while food included in declared tariff is part of the taxable accommodation value; separate restaurant classification may apply where AC and liquor licence conditions exist.