LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Hotel accomodation

AJAY SRIVASTVA (partner) (24 Points)

21 January 2015

whether service tax is applicable on hotel accomodation ,where invoces is below 1000/-, sometime above 1000/-,so this is to be calculated,what is declared tarrif. how it is defined--plz

Reply
Follow
Share

3 Replies

CA Neelam Maheshwari (internal Auditor) (497 Points)
Replied 21 January 2015

Renting of a Hotel, Guest House, Club, or other commercial places meant for Residential or Lodging purposes, having declared tariff of a room below Rs. 1,000 per day is exempt from service tax.

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 23 January 2015

The tariff declared for a room by the hotel is the declared tariff upon which the hotels normally offer discount. So if the declared tariff is say Rs. 1200 and after dicount of say 25% the actual rent payable per day is Rs. 900 then service tax is payable. But if the declared tariff is below Rs. 1000 per day per room, then no service tax is payable. The total invoice value is of no relevance to determine whether tax payable on not but if payable, then the calcualtion of tax is done on actual invoice value.

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 04 March 2015

“Declared tariff” includes charges for all amenities provided in the unit of accommodation like furniture, air-conditioner, refrigerators etc., but does not include any discount offered on the published charges for such unit. The relevance of ‘declared tariff’ is in determining the liability to pay service tax as far as short term accommodation is concerned. However, the actual tax will be liable to be paid on the amount charged i.e. declared tariff minus any discount offered. Thus if the declared tariff is Rs 1100/-, but actual room rent charged is Rs 800/-, tax will be required to be paid @ 5% on Rs 800/-.