GST impact on Indian Hospitality Sector
Goods and Services Tax, or GST! This seems to be the word everyone is treating with complete trepidation. There is still a lot of uncertainty and wariness in what the next will bring, and what all changes need to be made.
Here is a look regarding changes made in GST rates with respect to restaurants:
In the 23rd meeting of GST Council held at Guwahati, Assam on 10.11.2017, the following decisions related to Hotel Industry and restaurants were taken as follows:
EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA
S. No. | Services | GST Rate | Availability of ITC |
1.
| All Stand alone restaurants ( Air conditioner or otherwise) | 5% | Not Available |
Food Parcels (or Takeaways) | 5% | Not Available | |
2. | Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day | 5% | Not Available |
3. | Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day ( Even for a single room) | 18% | Available |
4. | Outdoor Catering | 18% | Available |
Earlier GST rates for Restaurants:
GST rate for restaurants depended on the type of air-conditioning facilities provided at the restaurant and if liquor is served.
Restaurants with No Air-Conditioning and No License to Serve Liquor
5% GST rate is applicable on supply of food/drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having licence to serve liquor.
Restaurants with Air-Conditioning
18% GST rate is applicable on taxable value of supply of food/drinks in restaurant having facility of air-conditioning or central heating at any time during the year
Restaurants with License to Serve Liquor
18% GST rate is applicable on supply of food/drinks in restaurant having licence to serve liquor.
5 Star Hotel Restaurants
28% GST rate is applicable on supply of food/drinks in air-conditioned restaurant in 5-star or above rated hotel.
GST Rate for Marriage Hall, Banquet Hall, Conference Center, etc.
18% GST rate is applicable on bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises.
GST Rate for Outdoor Catering
Supply of food/drinks in outdoor catering attracts 18% GST rate in India.
S. No. | Services | GST Rate | Availability of ITC |
1.
| Restaurants with no Air Conditioner and no license to serve liquor | 5% | Available |
2. | Restaurants with Air Conditioner | 18% | Available |
3. | Restaurants having license to serve liquor | 18% | Available |
4. | 5 Star hotel restaurants | 28% | Available |
5. | Marriage Hall, Banquet Hall, Conference Hall | 18% | Available |
6. | Outdoor catering | 18% | Available |