Winning Bizness Desk

Mumbai- An important meeting of the GST Council was held recently ending up a decision to change the GST rate on hotels. The changed rule is effective from July 18. If you are planning a summer vacation on or after July 18, then you will have to pay 12 per cent more for budget hotels as well. According to the current rules, if the rent of a hotel is less than Rs 1000, then GST is not levied on it. According to the new rule, 12 per cent GST has been implemented on hotels with rents less than Rs 1000.

effective from July 18

From July 18, 12 per cent GST will be levied on hotels with daily rent up to Rs 7500. If the hotel room rent is Rs 7501 or more, the rate of GST will be 18 per cent. By imposing GST on hotel rooms renting less than Rs 1000, the budget of the tourists will increase. This will not affect very small hotels. According to the rules, if the annual revenue of a hotel is less than 20 lakhs, then it will not come under the tax net. The changed rules will not have any effect on these hotels.

12 per cent GST now

Let's say you book a hotel room for two nights. Hotel room rent is Rs 800 per day. In this way the rent for two days becomes Rs 1600. Till now you will have to pay only Rs 1600 as hotel rent. On booking this hotel room from July 18 onwards, 12 per cent GST will be charged separately. Apart from hotels, GST has also been implemented on hospital rooms. If the rent of a hospital room is more than Rs 5000 per day, then GST of 5% will be levied. Although the government has given relief to ICU from this tax and kept it out of the purview of GST.