GST cut expected for luxury hotels, outdoor catering

A cut in tax rates is expected. The Goods and Services (GST) Council may announce following a meeting in Goa on Friday, September 20. Ahead of what is to be decided, it is speculated luxury hotels and outdoor catering services may get some relieves.

According to a person familiar with GST Council, tax cuts on luxury hotels and outdoor catering services are on card as the segments are not big revenue contributors.

Currently the luxury hotels having tariff charge of Rs 7,500 per night from customers are taxed 28 percent and outdoor catering services contribute 18 percent to the GST.

India is presently going through a phase of deepening economic slowdown and revenue of both the central as well as state governments have been hit.

The GST Council is trying to steer up the economy out of the slowdown with measures.

Currently central government pays state the revenue loss from GST and it is obliged to do so till 2022.

Amid revenue shortfall the states have urged the centre to pay them by borrowing from the market and repay those by extending GST cess levy by two or three years beyond the 2022.

It is understood the financial pressures of the governments are to be discussed in the meeting of GST Council on Friday.

Meanwhile, the CST Council is also trying to push a tax of 28 percent for all lotteries. Currently the state lotteries are taxed at 12 percent while those which are unauthorized by the state are taxed at 28 percent.