The CBIC on Thursday said that the hotels that are charging over Rs 7500 a day for room rent in any financial year will be considered as ‘specified premises’ for the next fiscal year. Also, the restaurants inside these hotels will attract 18% GST with input tax credit.
So from April 1, 2025, such restaurants will be taxed on basis of transactional value. This would mean that the idea of ‘declared tariff’ will completely go away which covers the cost of all the amenities in the rented accommodation, including air conditioners, furniture etc., but it will not account for any discounts given on the listed price of the unit.
The CBIC defines ‘specified premises’ as places from where the supplier will provide hotel accommodation services in the coming financial year. The cost of any unit of accommodation in these places will charge more than Rs 7,500 per day or of the equivalent amount.
In an FAQ issued on topic of ‘Restaurant Service’ at ‘Specified Premises’, the CBIC said that from April 1, 2025, the value of hotel accommodation provided in the previous financial year will be used to decide if the premises offering hotel services must be classified as ‘specified premises’ in the current year.