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GST compliant in Hotel Management Software
How GST affects the hotel industry?
GST is a tax on the business transaction - Sale, Purchase and Expenses. It is very important that the hotels, hotel chains, motels, hostels, resorts and other properties using property management system for their operations have a hotel software that is GST compliant.
Why is it important to have a GST ready hotel system?
Just like every other businesses, hotels are required to submit their GST returns on monthly or quarterly basis. This makes it very important for hoteliers to use a GST Ready Hotel Management System which not only captures the transactions with accurate GST rates but also reflect the same in various reports.
How can TradeMeSoft Hotel help?
TradeMeSoft Hotel specializes in developing solutions for the hospitality industry and since the announcement of GST, our staff have been hard at work to fully understand the scope of GST and making sure that our hotel management system complies.
- Our hotel PMS is GST Compliant, that means you do not have to worry about anything related to GST.
- TradeMeSoft Hotel Software will make operations quicker and more straightforward simplifying your operations.
- As a software provider, we have experts in place for answering any questions you may have regarding GST regulations.
- GST is based on transactions, our PMS will accurately calculate GST for Reciepts/Folio, Tax Invoice and GAF (Audit Reports).
- TradeMeSoft Hotel Software ensures that the various reports generated, match the accounting systems, making it easy for businesses to be evaluated and save time.
Impact of the GST in Hospitality Industry
The GST Course on goods and services tax (GST) for hotels include;
- Tax Invoice
- Advanced payment
- Security deposit
- Extra Charge
- Time share program
- Room Package
- Complimentary rooms
- Business use
- Private use
How GST affects Hotel & Tourism Industry
2016 winter parliament session will finally set the discussions on 122nd constitution amendment bill rolling, GST or the goods and service tax will be the point of focus, as the Modi government is keen on implementing the new tax regime from the 1st of April 2017. The final drafting of the CGST and IGST law is being done by the central government, while the state governments are busy drafting its version of SGST.
Let’s take a peek into the expected and unexpected ramifications of this bill on the hotel and tourism industry. Hotel and tourism industry in India suffers with heavy taxation in comparison with other countries which promote tourism equally or in some cases even less. Hotels in India currently levy taxes in the range of 18-20% compared with just 2-5% on an average across the world. The industry is levied with VAT, luxury tax and service tax. The tax paid differs from state to state and lack of uniformity has always been a concern for the consumer.
For the hotel industry currently, when room tariffs are at INR 1000 or above, applicable service tax is 60% of room tariff (8.7%), additional VAT (ranging between 12 to 14.5%) and luxury tax when applicable. In case food and beverage service tax of 5.8% along with VAT @ 12 – 14.5% is applicable. A combination of all these various taxes brings up the tax tally to between 25-27%, again this number varies from state to state. However, many apex bodies of Indian brewers, spirits and wine companies are lobbying before a Select Committee of the Rajya Sabha for including alcohol in the GST regime which the Constitution (122nd Amendment) Bill, but the final verdict on the same is yet to be seen.
Another reason to worry would be that at the moment the consideration is that Alcohol and Electricity consumption is beyond the purview of GST. Alcohol contributes to 20 to 25% of state revenue (state excise), thereby generating high revenue for the states. Since GST will make them share these revenues with the central government, they are reluctant to get alcohol included in the purview.
The government’s decision to keep electricity out of the ambit of the proposed goods and services tax (GST) would inflate the cost of power to consumers between 6-18% with the worst hit to be solar and wind power companies, experts and sources from the industry said. This is because these companies would have to pay GST for their inputs such as fuel and machinery but won’t be able to get these taxes refunded given that their output — electricity— is exempt. This additional 6-18% of tax will rollover to the consumer, thereby making an already expensive industry, far more so. Also, electricity is a significant input cost for Hotel Industry and keeping it out of GST means that hotel business cannot get input credit on taxes paid on electricity. Same goes for Alcohol.
GST is glimmer of hope for the Hotel and Tourism Industry, if we can keep the GST rate between 10 to 15%. GST might herald with its uniformity of tax rates, a better utilization of input credit which in turn benefits the end user in terms of affordability. Our country which stills reigns high on tourism despite the fact that the tourism industry is not as economical as its neighboring countries are, can possibly attract more tourists, by passing of the GST law, which then will indirectly amount to more revenues generated for the government.
Eating at small hotels and restaurants likely to get cheaper once GST kicks in
With the decks being cleared for the July 1 rollout of the Goods and Services Tax (GST), eating out and mobile internet, among other things, are set to get cheaper.
The Centre and states came to an agreement on Saturday on two draft laws which are needed to trigger the country’s biggest tax reform.
Under the GST norms, restaurants with an annual turnover of less than Rs 50 lakh will be able to avail of a composition scheme and pay a flat tax of 5% (2.5% central GST and 2.5% state GST) as the GST Council decided to widen the ambit of this scheme.
- GST will have a 4-slab structure of 5%, 12%, 18% and 28%.
- 0% tax essential items including rice and wheat, which constitutes 50% of CPI inflation basket.
- 5% on items of mass consumption such as spices, tea and mustard oil.
- 2 standard rates of 12% and 18% covering most manufactured items and services.
- 28% on luxury cars, pan masala, tobacco and aerated drinks.
Successive governments have pushed to implement the GST, which will create a common market and help lower the tax burden, shore up government revenues, temper inflation and boost economic growth by 1-2 percentage points, analysts say. But political differences over how to divvy up GST revenues or compensate states for lost income because of the new tax held up progress.
Once the tax reform comes into effect, consumers will pay a single and transparent tax proportionate to the value of goods and services. At present, they pay higher taxes as multiple levies are imposed – one over the other – at various stages starting from production to the retail sales.
The proposed GST will have four tax slabs. Farmers and small traders are exempt.
“The applied rates will be 5%, 12%, 18% and 28%. The cap will be on the higher side,” finance minister Arun Jaitley said without elaborating on the higher limit. States want the higher limit set at 40% to obviate the need to go to Parliament every time taxes have to be raised on certain goods and services.
Getting corporate India GST-ready
At the beginning of his address at a conference on the goods and services tax (GST), held in the capital last week, a senior official from the Central Board of Excise and Customs (CBEC) told the audience of 100-odd senior business executives that his presentation would last for around 45 minutes. Someone from the audience quipped, "Please take your time. We are in no hurry." The detailed presentation that followed - on how goods and services would be taxed under the GST regime - lasted a little over an hour. Hardly anyone in the audience had moved from the seat during the programme.
Clearly, corporate India - the hall in an upscale five-star hotel in central Delhi had representatives from the automobile and ancillary industries, FMCG, telecom, real estate, financial services, heavy machineries, exporters and importers, garment manufacturers, among others - is out to whet its appetite for the biggest tax reform the country has seen.
It seems to be slowly sinking in among top executives that this tax-led change would have a wide-ranging impact on their business decisions and structures in the near future. The time the companies have to get ready for the GST is six to 12 months
18% GST On Food Takeaway From Non-AC Area At AC Restaurant
A uniform Goods and Services Tax (GST) rate of 18 percent will be charged on takeaways as well as food served from a non-AC area of a hotel or restaurant if any of its part has a facility of air conditioning, the government has said. The GST regime, which was rolled out from July 1, provides for levy of 12 percent on food bill in non-AC restaurants. The tax rate for AC restaurants and those with liquor licence will be 18 percent while 5-star hotels will charge 28 percent GST. The Central Board of Excise and Customs (CBEC) has clarified through an FAQ on the GST rates that will be levied by restaurant-cum-bars where the first floor area is air- conditioned and used for serving food and liquor while the ground floor only serves food and non-AC. The CBEC said tax will have to be charged at 18 percent irrespective of from where the supply is made, first floor or second floor. CBEC FAQ Release If any part of the establishment has a facility of air conditioning, then the rate will be 18 percent for all supplies from the restaurant, With regard to tax rates that would be charged for take- away food from such restaurants, the CBEC said, Tax has to be charged at 18 percent on supplies of food made from their takeaway counter. Besides, such restaurants are also not eligible for the composition scheme as they are engaged in supplying liquor..