Citing the unprecedented rise in inflation, FHRAI requests the GST Council to evaluate the present GST structure for the hospitality sector. It has suggested that all F & B revenue of hotels be delinked from their hotel room tariff slabs and allowed to charge GST at 5 per cent without Input Tax Credit (ITC) under the composite scheme and 12 per cent GST with ITC. Similarly, for standalone restaurants, the two slabs of GST rates be maintained as stated above as was being done in the earlier Service Tax regime.
In addition to this, a reduction in GST on LPG used in hotels and restaurants from 18 per cent to 5 per cent will also help bring down the operational costs which will benefit customers. It has also asked for either the removal of GST on rent payments or be allowed input credit on rent payments to cushion the blow of the rising inflation. “IGST billing also should be allowed to hotels for corporate bookings and MICE. This will enable the companies to avail GST input credit which will incentivize them to spend their annual budgets in Indian cities other than holiday destinations of South East Asia,” shared Mr Gurbaxish Singh Kohli, Vice President, FHRAI.
