The Federation of Hotel & Restaurant Associations of India (FHRAI) has welcomed the GST Council’s decision to cut tax rate for restaurants to 5 per cent, without Input Tax Credit. A delegation from the industry led by Garish Oberoi, President, FHRAI, which also included Sudesh Poddar, President, HRAEI, and Pranav Singh, Hony. Secretary, HRAEI, had earlier met with the GST Council at Guwahati and requested the government to either bring down the GST rate on restaurants to 12 per cent with input credit or at 5 per cent without input credit. “We are extremely thankful to the government for making these much-required changes in the GST regime. This will help restaurants across India rationalise tariffs,” said Oberoi.
The association had requested the committee to look at seven key issues for the hotel and restaurant industry, namely:
- IGST be made available for immovable properties for tourism accommodation such as for hotels, cruises, campsites, and for restaurants.
- Transaction value and not declared tariff be the basis for rate categorisation of hotels.
- GST on hotels be lowered to 12 per cent.
- Foreign exchange earnings in tourism services be treated as exports or deemed exports.
- Hotels and resorts be allowed to unbundle their package rates.
- GST not be charged on complimentary meals.
- Rationalisation of GST on restaurants at 12 per cent from 18 per cent, with input tax credit or 5 per cent, without input credit, be done.