GST: Five-Star Hotels And Gold-Class Movie Experiences Get Pricier
Hotel rooms costing more than Rs 5,000 a night will be taxed at 28 percent.
If you enjoy a tipple at a pub in a five-star hotel or the gold-class movie experience, then you are already paying more than most. The new Goods and Services Tax (GST) will squeeze your wallet even more, according to the tax rates on services announced on Friday.
Non-air conditioned eating establishments not serving alcohol will be taxed at 12 percent under the new regime. This is a slight reduction from the current rate of 13-14 percent, according to Utkarsh Sanghvi, tax partner at EY India. It is, however, the standalone air-conditioned eateries serving alcohol that have benefited the most. They will be taxed at 18 percent under the new system, down from the 22 percent they pay now as value-added tax and service tax combined, according to Anurag Katriar, executive director and chief executive officer of deGustabus Hospitality Pvt., which owns the popular Indigo Deli chain.
This was on expected lines and with costs coming down due to foodgrains and other inputs being taxed at between zero and 5 percent, it is acceptable to us overall. However, taxing aerated drinks at 28 percent was a bit of a blooper; this rate should have remained at 18 percent.Anurag Katriar, Executive Director and CEO, deGustabus Hospitality
Establishments located in five-star hotels will be taxed 10 percent more at 28 percent. A spokesperson for JW Marriott said it was huge and would be an additional burden on the customer. Katriar said that the tax would be detrimental to tourism, as food tourism was an integral part of the Indian experience.
Rooms costing more than Rs 5,000 a night will be taxed at 28 percent, while those priced at Rs 2,500-5,000 and Rs 1,000-2,500 will fall in the 18 percent and 12 percent tax slabs, respectively. Rooms costing less than Rs 1,000 a night are exempt.
Entertainment
Indian cultural entertainment will now be exempt from taxation irrespective of ticket costs, according to Delhi Finance Minister Manish Sisodia. All other cultural events, including films with ticket prices below Rs 250, will be taxed at 12 percent, while those that exceed that price will be taxed at 28 percent, putting them in the same bracket as luxuries which they are not, said Nitin Sood, chief financial officer, PVR Ltd.
We are disappointed at being taxed at 28 percent. Two billion Indians watch cinema every year and we are certainly not in the same category as five-star hotels. We were hoping for a standard rate of 18 percent so that we could pass on the benefit to consumers in the form of ticket-price reductions.Nitin Sood, CFO, PVR