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With Covid-19 taking its toll on the hospitality sector, the Rajasthan Government has extended a helping hand to hotels and tour operators registered in the State. Now, other States are expected to do the same.
According to an order dated March 23 issued by the State government, it has been decided to reimburse State Tax due and deposited by hotels and tour operators registered under Rajasthan Goods and Services Tax Act, 2017.
Rajasthan has been the first to announce complete lockdown barring essential and medical services from March 22-31 to contain the spread of Covid-19 and keep people safe. Since the State attracts significant number of domestic and international tourists, any such closure is bound to affect the hospitality sector as large.
“Many States are likely to follow Rajasthan in doling out similar GST benefits to counter the fiscal impact of Covid-19. However, the sectors that will benefit under GST and the mechanism of providing the benefits — refunds, reimbursements, deferment etc — may vary from State to State,” said Harpreet Singh, Partner at KPMG. The order for reimbursement of State Tax due and deposited to hotels and tour operators will come into effect from April 1 and will remain in force till June 30. Here ‘State Tax due and deposited’ means the amount of State Tax (SGST) paid through debit in the electronic cash ledger account maintained by the enterprise after complete utilisation of the available amount of input tax credit of the SGST and Integrated Goods & Services Tax (IGST). This order will be applicable for taxable persons registered under the category of hotels, heritage hotels, resorts and tour operators. However, it will not cover stand-alone restaurants and clubs. Beneficiaries will be entitled for reimbursement of State Tax due and deposited in the operative period in the manner as may be prescribed, provided no reimbursement under this order is available for SGST to be leviable and paid on rental or leasing services, including own or leased non-residential property.
Penalty for evasion
If an entitlement certificate is issued to any beneficiary under various editions of Rajasthan Investment & Promotion Scheme (RIPS 2003, 2010, 2014 or 2019) RIPS-2003 and/or RIPS-2010 and/or RIPS-2014 and/or RIPS-2019, the reimbursement will be limited to the extent of benefit available under the said scheme.
The order cautioned that if any beneficiary is found guilty of any kind of evasion in the preceding financial year, that is, 2019-20, he or she will not be entitled for reimbursement under this order. Also, if at any time, it is found that a beneficiary has wrongly availed the reimbursement under this order, the same will be recovered as an arrear of State Tax along with interest at the rate of 18 per cent per annum and penalty equal to the amount wrongly availed of.
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