Starred hotels seek 18% GST

NT NETWORK

 

PANAJI

The Travel and Tourism Association of Goa on Monday asked for a lower GST on starred hotels with a request to bring down the rate to 18 per cent.

Currently five-star hotels with room tariff of above Rs 7,500 per night are taxed at 28 per cent. TTAG president Savio Messias said the steep tariff is hitting starred hotels badly and likely to harm the tourism prospects of the state.

Seeking reduction in the tax, he said, “Hotels are taxed under the concept of ‘declared tariff’, but all five-star hotels follow a dynamic pricing model with room rates fluctuating over the demand-supply factor.”

Room tariff fluctuates throughout the year and sometimes even within a day, pointed out the TTAG president, who explained that the room tariff declared by a hotel is rarely the actual tariff earned by it.

“We are asking for a return to the previous tax rate of 18 per cent,” Messias said speaking at a meeting on GST at the Menezes Braganza, Hall.

Other than lower tax on starred hotels, the representative body of the hospitality industry also called for the inclusion of restaurants serving liquor under the ‘composition scheme’.

Currently the restaurants serving liquor are out of the composition scheme even though their turnover may be lower than the threshold limit of Rs 1 crore where the tax rate is just one per cent (without input tax credit).

With nearly all restaurants, bars, eateries, etc, serving liquor in Goa, there are very few players benefitting from the marginal tax rate under composition.

The TTAG’s demand has been supported by the Goa Chamber of Commerce and Industry.  GCCI president Sandip Bhandare demanded   nine per cent GST rate so as to make five-star hotel charges comparable to tariffs in other countries.

In its 23rd meeting, the GST council had slashed the tax for all AC and non-AC restaurants from 18 per cent to five per cent (but without the input tax benefit) to make eating out cheaper and bring relief to small restaurant operators.

Restaurants in hotels are also taxed at five per cent, except in starred hotels where the tariff is more than Rs 7,500 per night. The GST rate for restaurants in starred hotels with tariff above Rs 7,500 per night is 18 per cent with benefit of input tax credit.

However, liquor for all restaurants whether AC or non-AC and within or outside hotels is taxed separately under VAT.