FHRAI has written to K Lakshminarayanan, Tourism Minister, Government of Puducherry, highlighting the problems being faced by hotel industry concerning the application of GST on food services provided in hotels, specifically in instances where the services are unbundled and unrelated to the accommodation provided. “The current practice of linking taxation of food services in restaurants to the room rates charged for accommodation is erroneous and poses several challenges. This approach contradicts the fundamental principle of GST, which emphasizes levying taxes on goods and services related to specific tax groups,” FHRAI stated.
