The government on Friday said the Goods and Services Tax
(GST) Council may go for a revision in the fitment of some goods and services
in the tax slabs after reviewing industry representations
NEW
DELHI: Hotel associations are actively engaging central and state government
officials in their push for a rollback of the 28% tax on hotels where
tariffs top Rs 5,000.
The government on Friday said the Goods and Services Tax (GST) Council may go for a revision in the fitment of some goods and services in the tax slabs after reviewing industry representations. The council is scheduled to meet on June 11.
According to industry executives, the tourism ministry has submitted a representation to the finance ministry in this regard after consultations with hoteliers.
The Federation of Associations in Indian Tourism & Hospitality, or FAITH, said it is hoping for a GST rate of 18% for the industry as post the 28% rate, hotels with a tariff of Rs 5,000 and above will be 7% higher than the current average rate, and restaurants in five-star hotels will be 9.5% higher.
“All chief ministers, finance ministers, tourism ministers, chief secretaries, revenue secretaries and tourism secretaries of all states have been sounded on the issue. A team is meeting tourism ministers and chief ministers to request their state finance ministers to vote favourably,” said a spokesperson for FAITH.
The GST Council has pegged GST rates for air-conditioned eateries and those with liquor licences at 18%, non-air-conditioned restaurants at 12%, hotels charging room rentals between Rs 1,000 and Rs 2,500 at 12%, Rs 2,500 and Rs 5,000 at 18%, and above Rs 5,000 at 28%. Hotels with tariffs below Rs 1,000 have been exempted from tax.
Garish Oberoi, vice-president, Federation of Hotel & Restaurant Associations of India (FHRAI), said, “At no point did we think of this 28% tax slab. We were thinking of a 12% tax slab. We had given figures to the government and that is what countries across the world are charging. Most states like Uttar Pradesh, Rajasthan, Himachal, Haryana, Punjab and Uttarakhand will have to pay much more. We had asked for one tax across the board.”
Oberoi said FHRAI members had been invited for a meeting by the GST sectoral group on Saturday.
According to a research by consulting firm HVS, the primary GST rate of 28% on hotels, if implemented, will make star-category hotels in India the most taxed in the world, surpassing hotels in New York, London and Paris, even without add-on levies such as municipal tax, service charge, etc. “If one were to put aside other costs (such as service charge, municipal tax, cess etc) on an ‘apples to apples’ comparison, not a single state (in India) was levying such a high tax on its guests as will now be the case with this new tax regime,” HVS said in its report.
The government on Friday said the Goods and Services Tax (GST) Council may go for a revision in the fitment of some goods and services in the tax slabs after reviewing industry representations. The council is scheduled to meet on June 11.
According to industry executives, the tourism ministry has submitted a representation to the finance ministry in this regard after consultations with hoteliers.
The Federation of Associations in Indian Tourism & Hospitality, or FAITH, said it is hoping for a GST rate of 18% for the industry as post the 28% rate, hotels with a tariff of Rs 5,000 and above will be 7% higher than the current average rate, and restaurants in five-star hotels will be 9.5% higher.
“All chief ministers, finance ministers, tourism ministers, chief secretaries, revenue secretaries and tourism secretaries of all states have been sounded on the issue. A team is meeting tourism ministers and chief ministers to request their state finance ministers to vote favourably,” said a spokesperson for FAITH.
The GST Council has pegged GST rates for air-conditioned eateries and those with liquor licences at 18%, non-air-conditioned restaurants at 12%, hotels charging room rentals between Rs 1,000 and Rs 2,500 at 12%, Rs 2,500 and Rs 5,000 at 18%, and above Rs 5,000 at 28%. Hotels with tariffs below Rs 1,000 have been exempted from tax.
Garish Oberoi, vice-president, Federation of Hotel & Restaurant Associations of India (FHRAI), said, “At no point did we think of this 28% tax slab. We were thinking of a 12% tax slab. We had given figures to the government and that is what countries across the world are charging. Most states like Uttar Pradesh, Rajasthan, Himachal, Haryana, Punjab and Uttarakhand will have to pay much more. We had asked for one tax across the board.”
Oberoi said FHRAI members had been invited for a meeting by the GST sectoral group on Saturday.
According to a research by consulting firm HVS, the primary GST rate of 28% on hotels, if implemented, will make star-category hotels in India the most taxed in the world, surpassing hotels in New York, London and Paris, even without add-on levies such as municipal tax, service charge, etc. “If one were to put aside other costs (such as service charge, municipal tax, cess etc) on an ‘apples to apples’ comparison, not a single state (in India) was levying such a high tax on its guests as will now be the case with this new tax regime,” HVS said in its report.
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