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GST - Accommodation Service - tax to be levied on actual sum charged but Declared tariff to decide tax slab

Published: Jan 05, 2018

By TIOL News Service

NEW DELHI, JAN 05, 2018: CONFUSION continues to result in higher non-compliance index in the GST regime. Having realised so, the Govt has decided to issue as many Circulars as possible to clarify ground-level issues. In one such Circular issued yesterday evening, the CBEC has clarified that the Declared or published tariff is relevant only for determination of the tax rate slab. GST will be payable on the actual amount charged (transaction value) for accommodation services.

The GST rate would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs. 7000 per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs. 8000.

The Circulra further underlines that the tariff declared anywhere, say on the websites through which business is being procured or printed on tariff card or displayed at the reception will be the declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST.

In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply. The Declared tariff at the time of supply would apply. If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-.