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Case Study

28 June 2017

I have a small case study:
Suppose I am a travel agent.
My GST rate is 5%.
I take hotel service from a hotel with tariff 8000 But the hotel has not taken GST registration as it is beyond the threshold.
Now the hotel will bill me at 8000.
but when I bill the customer for the hotel service , will I charge 5℅ tax or 28% under RCM?

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6 Replies

Parul Maiya Newar (48 Points)
Replied 28 June 2017

KUSHAGRA SINGHAL (47 Points)
Replied 28 June 2017

you will charge gst @ 5% from your customer

Parul Maiya Newar (48 Points)
Replied 28 June 2017

and what if the hotel is registered and charges me 28 percent GST.
since I am will not be able to claim input credit of the same , will I add this to the cost of my package and further bill at 5%.
I that case the cost will go 33 % higher right?

KUSHAGRA SINGHAL (47 Points)
Replied 28 June 2017

A registered person who is liable to pay tax under RCM shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered person under GST on the date of receipt of goods or services or both.

And the registered person who is required to pay under RCM shall issue a payment voucher at the time of making payment to the respective supplier.

KUSHAGRA SINGHAL (47 Points)
Replied 28 June 2017

sir u will charge gst only on the amount of your commission and not on whole bill amount.....if u are getting commision directly from hotel and you are charging nothing from customer then it's a different case as you will not be required to issue a invoice then...it is very much similar to your old service tax ..just the thing is that you have no abatements here...