The Central Board of Direct Taxes has clarified the implementation of the rates of Goods and Services Tax(GST) on accommodation bills. The board has simplified that there will be no separate tax structure for the five-star hotels and a non-five-star hotel.
CBEC said in a tweet, “Clarification on the Goods and Services Tax rates on hotel accommodation tariff less than ₹7,500 to attract GST at 18% even in 5-star hotels”. It added, “Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST”.
So based on the fresh circular from the direct taxes body, a room in any hotel that includes a 5-star one or any cheaper one and that comes at ₹7,500 tariff rate would attract only an 18% GST rate.
Earlier, there were rumors that the government would charge hotel rooms at 28% of GST rate irrespective of tariff slapped for accommodation. But now the government has slashed the rumors and have clarified the issues.