CBEC Clarification regarding levy of GST on accommodation
services, homestays, printing, legal services etc on 04.01.2018
Accommodation Services
1. Re : Whether GST will be charged on actual tariff for
accommodation services : Declared or published tariff is relevant only for
determination of the tax rate slab. GST will be payable on the actual
transaction value.
2. Re: Whether GST
rate will change if cost goes up more than the tariff due to additional bed etc .: 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.
3. Re: Ascertainment of the declared tariff : 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.
4. Re: What rate in case of different tariff at different
times depending on season or flow of tourists: 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.
5. Re : In Case tariff differs between booking and actual
usage : in case of Declared tariff at the time of supply would apply.
6. Re: In case tariff changes at the time of up gradation: 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/-
7. Re: Whether Price or declared tariff includes the tax
component or not in case of accommodation in hotels, inns etc. : Price/
declared tariff does not include taxes.
8.Re: Room rent in hospitals to in patients : The room rent
in hospitals is exempt.
9. Re : The rate of tax on bakery items : In case bakery
items are supplied by a bakery where eating place is attached to manufacturer
for the purpose of composition levy in such case any service by way of serving
of food or drinks including by a bakery qualifies under section 10 (1) (b) of
CGST Act and hence GST rate of composition levy for the same would be 5%.
10. Re : Homestays providing accommodation through an
Electronic Commerce Operator, below threshold limit are exempt from taking
registration: Vide Notification No. 17/2017-Central Tax (Rate), GST in case of
accommodation services provided in hotels, inns guest houses or other
commercial places meant for residential or lodging purposes provided by a
person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category
states) per annum are not required to take registration and such persons, even
though they provide services through ECO, are not required to take
registration.
Supply of Books :
CBEC has given clarification whether supply in the
situations listed below shall be treated as a supply of goods or supply of
service:
1. The books are
printed/ published/ sold on procuring copyright from the author or his legal
heir as is the case of White Tiger Procures copyright from Ruskin Bond.
2. The books are printed/ published/ sold against a specific
brand name like Manorama Year Book
3. The books are printed/ published/ sold on paying
copyright fees to a foreign publisher for publishing Indian edition of foreign
books as is the case of Penguin (India) Ltd. pays fees to Routledge (London)
and Ananda Publishers Ltd. pays fees to Penguin (NY)
The supply of books
shall be treated as supply of goods as long as the supplier owns the books and
has the legal rights to sell those books on his own account.
Provision of Legal
Service to Business entity
Re : Legal services other than representational services
provided by an individual advocate to a business entity are liable for GST
under reverse charge mechanism:
In case of legal services including representational
services provided by an advocate including a senior advocate to a business
entity, GST is required to be paid by the recipient of the service under
reverse charge mechanism, i.e. the business entity.
