47th GST council meeting has brought some very drastic changes and have increased GST rate on various products and services and also removed exemption of various services.
Two such changes are discussed as below:
1. GST needs to be charged on hotel rooms, guest house, club etc even when the value of hotel room is below Rs. 1000 per day or equal.
Earlier GST was only applicable on hotel rooms above Rs. 1000 per day at 12% and above Rs. 7500 per day at 18%.
However, the 47th GST council meeting has decided to remove the services of hotel room, club, campsite from the notification of Nil rate GST and hence now any hotel room having a declared tariff of upto Rs. 7500 will be charged to GST at 12%.
Do remember this is a declared tariff and even if your tariff after discount comes below the prescribed threshold you would be charged the above mentioned GST rate as per the tariff declared by the hotel.
The above amendment has been brought in by Notification No. 04/2022 Dt. 13.07.2022 wherein entry no. 14 of Notification no. 12/2017 has been omitted. Entry no. 14 of notification no. 12/2017 is as under:
“Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent.
Rate of GST Nil“
Thus, now any hotel room, guest house, club or campsite is rented same will be liable for atleast 12% GST.
2. GST needs to be charged on rooms rented out by hospital and clinical establishment having room charges above Rs. 5000 a day.
Earlier all healthcare related services were outside the purview of GST and were exempted from GST. However vide notification No. 03/2022 and 04/2022 Dt. 13.07.2022, 47th GST council has brought the above mentioned service of a room service under the purview of GST.
Wherein GST at the rate of 5% will be charged if the room charges are above Rs. 5000 a day.
This amendment is not welcomed by the health sector as it will increase the cost of health services also it has not been clarified as to how GST will be charged in case of composite services along with other services in hospital such as other checkup services etc. because no one comes in hospital just to rent a room.
Further, it has been mentioned that such GST will not be charged if the room is a Intensive Care Unit (ICU)/ Critical Care Unit (CCU)/ Intensive Cardiac Care Unit (ICCU)/ Neo natal Intensive Care Unit (NICU)].
Thus, we need to see if we get some clarification about such composite services from government.
What are your views comment below.
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