Policy

Hotel tariffs, outdoor catering get GST rate cuts

Shishir Sinha Panaji (Goa) | Updated on September 20, 2019 Published on September 20, 2019

Assesses with ₹2-cr turnover need not file annual return for two years

The GST Council on Friday decided to lower GST rates on hotel tariff and outdoor catering, giving a boost to the hospitality sector. 

The GST Council accepted the recommendation of the Fitment Committee for not lowering tax on auto sector. The GST Council did not take up rate cut proposal for auto sector and biscuits.

Small Goods & Services Tax (GST) assesses with annual turnover up to ₹2 crore can also heave a sigh of relief as the GST Council decided to make filing annual returns for the first two years of the introduction of new indirect tax regime as ‘optional’. For all practical purposes small assesses have been exempted from filing returns.

 

On the hotel tariffs front, daily room tariff beyond ₹7,500 per day will attract GST at the rate of 18 per cent as against existing 28 per cent. Room tariff between ₹1,000 and ₹7,500 will continue to attract 12 per cent GST. There will be no GST on room tariff up to ₹1,000. 

The GST Council has also decided to slash the rate on outdoor catering to 5 per cent from 18 per cent. However, no input tax credit (ITC) will be available to them.

The Council met here on Friday for 37 time and discussed many issues besides cut in GST rates on hotel tariffs and One such issue was exempting small assesses from filing annual returns. As of now, there are over 1.39 crore assesses, out of which 86 per cent of them are having turnover below ₹2 crore. Now, all these will not be mandatorily required to file returns for fiscal year 2017-18 and 2018-19.

Every GST assessee has to file an annual return in GSTR 9. Among these assessees, every registered taxable person whose turnover during a financial year exceeds ₹2 crore will also be required to get his accounts audited by a chartered accountant or a cost accountant and then submit a reconciliation statement in GSTR 9C along with GSTR 9. 

Assessees under the composition scheme (businesses with turnover up to ₹1.5 crore) will be required to file the GSTR 9A form. The last date for filing all these returns for the financial year 2017-18 has been extended to November 30 from August 31. The last date for financial year 2018-19 is December 31, 2019.

Experts feel that such a decision will lessen the burden on IT network of the new indirect regime beside giving much awaited relief to small assesses. “Withdrawal of annual returns for small taxpayers would push the tax officers to issue more notices so as to check and verify tax claims for the year, due to paucity of annual level data available with them,” said Rajat Mohan, Senior Partner, AMRG & Associates.

The Council also discussed ways to simplify the annual returns for all others assesses. Some States feel that the small numbers of big taxpayers are very important and there is need to simplify the return system for them. Assessees, particularly the smaller ones, have been struggling with the returns. 

Finance Commission

Meanwhile, Chairman of 15 Finance Commission NK Singh made a detailed presentation on the revenue position during the meeting. 

Published on September 20, 2019
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