The current GST on Hotel, Restaurant industries could be change soon, which would help the hotel and restaurant industries. The Ministry of Finance is actively considering the proposal to change the current GST structure. With an input tax credit (ITC) benefit, the Goods and Services Tax (GST) on hotels and restaurants could go up from 5% to 12%.
The industry has been asking the Centre to change the way GST is set up because their input costs have gone up and they need relief. Due to differences in locations, the hotel and restaurant business has asked for help. At the moment, hotels and restaurants pay 5% GST, but they don’t get any ITC benefits.
The proposal has been sent to the GST Council’s fitment committee, which is expected to talk about it at the next meeting. But hotels where a room costs more than Rs 7,500 have to pay 18% GST and get a credit for the tax they paid on the room.
ITC is a way to stop taxes from piling up on top of each other. In simple terms, “tax on tax” is another way to say “tax on tax.” Under the current tax system, you can’t use a credit for taxes collected by the Central Government to pay for taxes collected by the State Governments, and vice versa.
At its 49th meeting in February, the GST Council decided to pay off all GST compensation debts owed by the states. The GST rates on liquid jaggery (raab), pencil sharpeners, and some tracking devices were also cut by the Council.
Rates on liquid jaggery or sugarcane raab, which used to be 18% if it was sold loose, have been cut to 0%. If it already comes in a box, the rate has been cut to 5%. The GST rate on pencil sharpeners has been cut from 18% to 12%.
Read more news
