GST Council may rationalize rates for five-star hotels

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According to the report of Business Standard, The Goods and Services Tax (GST) Council might rationalise rates for five-star hotels after a recommendation by the fitment panel.

“Hotels and outdoor catering are two big items where the fitment panel has recommended rate cuts.” a government official told the Business Standard.

  • The committee has suggested two ways of rationalizing rates for five-star hotels. First is to cut the GST rate to 18 percent from the current 28 percent, and the other is to increase the threshold on room tariffs.
  • At present, the GST rate on rooms costing Rs 7,500 per night is 28 percent. This threshold might be raised to rooms with a tariff of Rs 10,000 per night.
  • Goa, Rajasthan and some other states have asked for a GST rate cut for five-star hotels.
  • The fitment panel has suggested a rate cut to 5 percent from 18 percent on outdoor catering.
  • The Council will also consider exempting small businesses, with a turnover of up to Rs 2 crore, from filing GST returns for 2017-18 and 2018-19.

The GST Council is scheduled next meeting on September 20.

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