Hotel accomodation

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.

“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/-.