18% or 5% GST: Houseboat Industry Battles Tax Woes

Last updated: 22 November 2024

Quick Summary
Houseboat owners in Kerala are in a difficult situation due to conflicting GST rates. While they have been paying 5% GST based on assurances, the GST office is now demanding 18% retrospectively from 2017. This has led to notices for substantial amounts, causing significant financial worry. The core of the issue lies in how houseboats are classified: the State GST office views them as 'water transport' (18%), while the Central GST office considers them 'tour operators' (5%).

Kerala's houseboat owners facing uncertainty as the GST office demands 18% GST from houseboat owners with a retrospective effect from 2017, causing uncertainty for owners in Alappuzha, Kochi, and Kumarakom.

Houseboat GST Row: 18 vs 5 Tax Battle

Current Status

Houseboat owners have been paying 5% GST based on Central GST office assurance since 2017.

A petition was submitted to cancel the move, but no resolution from the state government yet.

Retrospective GST Demand

Notices have been issued to houseboat owners demanding Rs. 1-7 crore each.

If the issue is unresolved by month-end, owners may need to pay 10% of the demand or risk conversion to an official demand.

Classification

  • Kerala reclassified houseboats as "water transport" instead of "tour operators" .
  • State GST claims houseboats fall under "water transport" (18% GST).
  • Central GST considers them "tour operators" (5% GST).

Comparison with Other States

Assam and West Bengal levy 5% GST on similar services.

Stakeholders urge the state government to act swiftly, as the issue stems from its GST office, not the Centre.

FAQ :

Houseboat owners are facing demands for 18% GST retrospectively from 2017, despite having paid 5% based on previous assurances.

Retrospective GST demand notices have been issued, with individual owners facing demands ranging from Rs. 1 crore to Rs. 7 crore.

The State GST office classifies houseboats as 'water transport' (18% GST), while the Central GST office considers them 'tour operators' (5% GST).

If unresolved by the end of the month, owners may have to pay 10% of the demanded amount or face it being converted into an official demand.

No, states like Assam and West Bengal levy only 5% GST on similar houseboat services.

Stakeholders believe the issue stems from Kerala's GST office, not the central government.



Guest

News posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Comments :

Recent News :

  1. Taxpayers Beware: PIB Exposes Fake Income Tax Notice Asking for Rs 6000 Payment
  2. NCLT Launches e-Inspection and e-Certified Copy Services to Enhance Digital Access for Stakeholders
  3. ITR-7 Online Utility Enabled on Income Tax Portal for AY 2026-27
  4. MSME Development (Amendment) Bill, 2026 Passed by Parliament
  5. Direct Tax Collections Jump 23% to Rs 8.11 Lakh Crore as on 10th Aug 2026
  6. CBDT Approves Sir Ganga Ram Trust Society for Scientific Research Tax Benefits Under IT Act, 2025
  7. No UPI Charges for Consumers: Government Clears Air on Merchant Fee Rumours
  8. UPI Transactions May Attract Charges in Future as Lok Sabha Passes Taxation Amendment Bill
  9. ICAI Hosts Multipurpose Empanelment Form (MEF) 2026-27
  10. Income Tax Department Releases ITR-6 Excel Utility, JSON Schema and Validation Rules for AY 2026-27

More »


Popular News




Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Pro Member SUJOY MAZUMDARSUJOY MAZUMDARPro Member damodara rao tedladamodara rao tedlaPro Member arun luharukaarun luharukaPro Member ARUN KUMARARUN KUMARPro Member Dhananjay PatilDhananjay Patil
Subscribe to Pro
Join an elite circle of professionals


Browse by Category