Query regarding service tax on short term accommodation

This query is : Resolved

abhishek (Querist)
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09 March 2012 We are running a small lodging and restro (non Ac / No alcohol) in maharaashtra . Restro has been given on contract to third party and turnover of restro is less than 9 laks and turnover of hotel is more than 10 laks....
we have following query.....

1)what is covered under declared tariff? How declared tariff are decided? How many times a hotel can revise its declared tariff?

2)Is extra bed will form a part of declared tariff?

3)What if pick season rates are more than 1000 and off season rates are less than one 1000? will off season billing attract service tax?

4)Will restro bill attract service tax?

5)If we sell one room at 1500 rs (AC) and on same day we sell (NON AC) room at 900 rs what will be the service tax effect?

6)It is a partnership firm.
When we need to file service tax challan as well as return.

abhishek

abhishek (Querist)
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13 March 2012 Where are the all experts......Please do reply to my query.....
Thanx in advance.....

Regards,
Abhishek Zantye,
abhishekzantye@gmail.com

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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19 July 2025 1) What is covered under declared tariff? How is declared tariff decided? How many times can a hotel revise its declared tariff?
Declared Tariff:
The declared tariff is the maximum price at which the room is ordinarily offered to the public for hire on a single day. It is the published rate fixed by the hotel management for letting out rooms. It is inclusive of all taxes and charges except service tax.
How is it decided?
The hotel sets this tariff based on factors like location, facilities, market demand, competitor pricing, etc. It should be documented and available for reference during inspections.
Revision frequency:
There is no fixed limit on the number of times a declared tariff can be revised. It can be revised as often as required but the revised tariff should be properly documented and notified internally.
2) Is extra bed part of declared tariff?
Extra bed charges are not part of the declared tariff if they are charged separately from the room rent.
The declared tariff only includes the rent for the room itself; extra facilities like extra beds, food, etc., can be charged additionally and attract service tax separately.
3) What if peak season rates are more than Rs. 1000 and off-season rates are less than Rs. 1000? Will off-season billing attract service tax?
Service tax liability arises if the declared tariff or the actual rent charged exceeds Rs. 1000 per day per room.
If during off-season the room is let out at less than Rs. 1000, service tax is not applicable on that room.
However, if the declared tariff for that room category is above Rs. 1000, then service tax applies irrespective of the actual rent charged (even if it is below Rs. 1000 in off-season).
So, it depends on whether the declared tariff is above Rs. 1000 or not.
4) Will restaurant bill attract service tax?
Since the restaurant is given on contract to a third party and turnover of restaurant is below Rs. 9 lakhs, service tax liability rests with the contractor (third party), not the hotel partnership firm.
The restaurant contractor must comply with service tax provisions if applicable.
5) If we sell one room at Rs. 1500 (AC) and on same day sell a non-AC room at Rs. 900, what will be the service tax effect?
For the AC room at Rs. 1500, service tax is payable since it exceeds Rs. 1000 declared tariff limit.
For the non-AC room at Rs. 900, if declared tariff is below Rs. 1000, no service tax on that room.
Service tax calculation is done per room category basis.
6) When to file service tax challan and returns for partnership firm?
Service tax challan: Pay service tax collected on or before the due date, generally by 6th of the following month.
Service tax return: File ST-3 return quarterly, generally due on the 25th of the month following the quarter.
Example: For Q1 (April-June), return is due by July 25.

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