Government announces GST rate for 5 Star hotels at 28 per cent

5 star hotels to be more expensive than before Government has fixed the 28  per cent slab for these hotels Normal tariff per unit accommodation is Rs 7500

The Government’s new Goods and Service Tax plan has categorised star hotels with tariff of a unit of accommodation of less than Rs. 7500 per day as 18%. Under the new regime, hotel rooms with tariffs below Rs 1,000 per day will attract zero tax, those below Rs 2,500 will be taxed at 12%, while staying in rooms with tariffs between Rs 2,500 and Rs 7,500 will be taxed at 18%. The highest slab of 28% tax has been reserved for only luxury hotel accommodation, which, with the latest clarification, can be defined as the one with tariffs above Rs 7,500 per day.

But according to the recent bulletin released by the Centre, rate of GST for 5 star hotels would become expensive. The maximum amount of GST slab, 28% per cent is now applicable to the 5 star hotels. So the charges have increased to 10 per cent than before.

Before the implementation of GST, the tax in the 5 star hotels was equivalent to 18 % which now was increased to 28%. The tariff of a single unit of accommodation which earlier cost Rs 5000 per day would now cost Rs 7500 per day per unit.

The GST Bill of the Central government came into practice from July 1^st. But there arose innumerable amount of questions regarding this which the state government authorities and the financial experts have been unable to fathom.