Budget hotel owners make plea for 5% GST slab

By | May 5, 2017
(Last Updated On: May 5, 2017)

Budget hotel owners make plea for 5% GST slab

Budget hotel owners make plea for 5% GST slab

A delegation of small-hotel owners led by Federation of Indian Chambers of Commerce and Industries (FICCI), on Thursday, made a representation before deputy chief minister and finance minister, Nitin Patel, seeking 5% or lower Goods and Service Tax (GST) slab for budget hotels – those with tariffs below Rs 2,000.

Based on recent government statements, the tax slab for service sector is expected to increase to 18% under GST. Budget hotels, which comprise almost 80% of the market, fear they will be hit hard.

“The budget hotel sector believes that contribution to the growth of the economy is vital, but it is equally important that services remain within the reach of people,” reads the representation.

“Any substantial increase in taxes will leave no choice for these hotels but to pass on the burden to the end-customer,” the representation added. Hotels with tariff below Rs 1,000 have been getting service tax exemption since 2012, and it has remained unchanged despite price rise due to inflation.

Hoteliers also expressed their concerns about the levying of luxury tax. On hotels with tariffs ranging from Rs 501 to Rs 2,000, the luxury tax is 4%, while for anything higher, there is a 6% luxury tax. “In contrast, there is no luxury tax levied in states such as Jammu & Kashmir, Sikkim, Orissa and Arunachal Pradesh,” the representation observed. “Many other states either have a low rate of luxury tax or the threshold limit is pegged at higher slab, such as in Rajasthan and Madhya Pradesh, for relief to budget hotels,” the representation added.

Sajjan Purohit, a city-based hotelier, said, “We want to be a part of the one-nation-one tax regime. We just don’t want it to happen at the cost of our businesses – there is no way the budget hotel industry will be able to sustain a high GST slab.”   Source – http://timesofindia.indiatimes.com [05-05-2017]

Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

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