Council considers confusion over charging GST in hotels

Ken Copeland
October 7, 2017

Prime Minister Narendra Modi said that the Good and Service Tax (GST) has become simpler after the council's recommendations and that it was well in line with the government's constant endeavour to safeguard citizens' interests and ensure the growth of India's economy.

Speaking in Patna yesterday, he suggested that tax payers with a turnover of up to 1 crore 50 lakh rupees may be permitted to file their returns on a tri-monthly basis.

Exporters body FIEO today said the GST Council's initiatives, including introduction of e- wallet, would bring relief to traders.

The Group of Ministers headed by Sushil Modi, set up to look into GSTN glitches, will also brief the Council on the portal's functioning.

SERVICES: Hotel services such as AC hotels serving liquor, Room tariffs between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels will attract 12 per cent tax under GST slab.

'The medium and small companies should remain in the tax net but we will relax their compliance burden, ' he said. GST rate for AC restaurants may get come down to 12 per cent from existing 18 per cent.

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For businesses with a turnover up to Rs 1.5 crore, the council permitted filing of quarterly returns as against the monthly filings mandatory earlier.

For future, every exporter to get an e-wallet for refunds. E-way Bill should be levied only on inter-state sale having a value of more than Rs 1 lakh. "For example, if a grocery shop sells branded item at 5% GST, but pays zero tax for the goods sold loose, the question now arises if the exempted goods should also be counted to determine turnover", said Jaitley.

"Various relief granted by the GST Council today will be a major breakthrough in simplifying GST and encouraging fast adoption & access of GST among the trading community of the country and will clear the air of uncertainty and chaos", the Confederation of All India Traders (CAIT) said in a note.

'We are not in a denial mode that there is a problem in the SME (small and medium enterprises) sector, ' said a senior lawmaker who has been working with Modi's office to combat the economic slowdown.

The finance minister added that the pattern of collection [of the GST] is not clear after two months, because it was a period of transition.

Taking stock of the exporters' working capital that was getting blocked under GST affecting their cash liquidity, the Council has made a decision to disburse their refunds through cheques for July and August from October 10 and October 18 onwards respectively.

Other reports by Guamnewswatch

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