Hotel - Declared Tariff

Q-1. IF declared tariff is Rs.1000 or more, it is immaterial at what rate the same is given. Even the same is given at Rs.500 applicable service considering appropriate abatement is required to be paid.

Q-2. I can not understand question exactly.

Q-3. If Room Tariff is below Rs. 1000/- Room Rent is not taxable. Dining is not included in Room Tariff and hence different service. Customer is free to take food or go elsewhere to have Food. It is not required to be clubbed with Room Tariff and there is no scope for composition.

What will be position of chargibility of Service tax if Charges per Student is Rs. 1000/- per day  and given to college students for one year as a lodging facility, Room is shared either twin sharing/triple sharing.

What will be the effect where the actual amount invoiced is greater than Declared Tarrif? 2nd question. Assume Declared Tariff is Less than 1000 but actual bill is more than 1000, what will be the impact?

Hi Shivani,

The answers to all the questions are very much apparent from the text quoted by you.

Que-1 – the words used are ‘declared tariff’ and the definition of ‘declared tariff’ excludes any discount. Thus, the answer is quite evident that no exemption would be available in such case.

Que-2 – again the significance of the question is not understood. The accounting entries have to be the same as applicable to all the abatement related activities such as construction, GTA, etc.

Que-3 – As stated by you, the tariff is less than Rs.800/-. Thus, the said exemption has to be available. The restaurant services are completely different from this, for which a separate invoice would be raised by the Hotel. Thus, the service tax would be charged on Rs.500/- separately considering the ‘restaurant services’ under Rule 2B of the Valuation Rules.

Originally posted by : girish
	What will be position of chargibility of Service tax if Charges per Student is Rs. 1000/- per day  and given to college students for one year as a lodging facility, Room is shared either twin sharing/triple sharing.

The exemption has been granted to the tariff equal to or less than Rs.1000/- of a unit given for residential or lodging purposes.

Thus, in your case, it is evident that the exemption shall be available, irrespective of the fact that the rooms are in twin sharing, etc. basis.

Originally posted by : Raja
	What will be the effect where the actual amount invoiced is greater than Declared Tarrif? 2nd question. Assume Declared Tariff is Less than 1000 but actual bill is more than 1000, what will be the impact?

This is an interesting question. One needs to understand why the room rent has been increased from the declared tariff, as the customer, himself won’t allow to be charged in excess. Even if the same is kept aside, if such inflation is on account of some additional services provided i.e., such as restaurant services, etc. then one needs to bifurcate the tax liability within the invoice itself and it should not create any issues.

However, if such inflation is purely on account of accommodation (not discussing why customer wouldn’t object), I suggest such person should by himself charge and pay Service tax on the entire amount charged. Such an act may amount to mens rea to attract penal consequences.

ICAI CHARGE FEE FROM STUDENT LIKE REGISTRATION FEE , EXAM FEE ETC THEN INSTITUTE IS LIABLE FOR SERVICE TAX? INSTITUTE PAID AMOUNT TO DIFFERENT CENTER FOR CONDUCTING EXAM THEN THIS EDUCATIONAL INSTITUTE IS LIABLE FOR SERVICE TAX?

DEAR SIR, 

I HAVE A HOTEL OF 4 FLOORS...OUT OF WHICH 5 ROOMS ARE PREMIUM ROOMS HAVING DECLARED TARRIFF OF 1100/-. REST ALL ROOM ARE DECLARED 800/-.

NOW

1. Will registration be required for whole hotel or can i take registration for just 5 rooms because rest are exempted?

2. Can I get small service provider exemption on turnover of those 5 rooms (if i take registration of 5 rooms.)

3. will there be a liability for registration if

turnover of premium rooms is - 500000/-

turnover of normal room i.e. RS 800/day is 4500000/-

1. Service tax registration is taken for the premises. Thus, registration needs to be obtained for the entire hotel i.e., premises and not for the specified rooms.

1. Yes. You may provide your turnover remains less than 10 lakhs.

1. You may claim exemption from registration as your taxable turnover is less than 10 lakhs. Accordingly, no liability arises.