GST will be levied on hotel booking and train ticket cancellation charges.
The rate at which GST was given at the time of booking will be applicable here as well.
With the implementation of GST, now more money will have to be paid for cancellation of ticket or room booking.
New Delhi. Now you should book train tickets and hotel rooms very carefully. This is because canceling the booking now will prove to be very heavy on your pocket. The reason for this is the application of Goods and Services Tax (GST) on the charges levied on cancellation of booking. According to the rules of Goods and Services Tax, canceling a booking is tantamount to withdrawing from the deal. There is a penalty for canceling the deal. That is, now the customer will have to pay tax on the penalty.
It is worth noting that for a long time there was a dispute about this. Now the Finance Ministry has clarified that if the cancellation is related to the service, then GST will have to be paid on this cancellation charge. The Tax Research Unit of the Ministry of Finance has also issued a circular in this regard. According to this, the rate at which the customer had paid GST at the time of booking, on cancellation, he will have to pay GST on the cancellation charge at the same rate.
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contract service supply
The Tax Research Unit has issued three circulars. One of these explains the imposition of duty for breach of contract. It states that the booking of hotel, entertainment and train tickets is like a contract in which the service provider promises to provide a service. When the Customer breaches this contract or cancels the booking, the Service Provider receives a certain amount as cancellation charge. Since the cancellation charge is a payment made for breach of contract, it will attract GST.
how much will be the tax
In the circular issued by the Tax Research Unit, it has been told that 5 percent GST will have to be paid on the cancellation charge for first class or AC coach tickets. This is the rate levied on the ticket. Similarly, on cancellation of air travel or hotel booking, at the rate at which GST was paid at the time of booking, on cancellation, he will have to pay GST on cancellation charge at the same rate.
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No GST on inn rooms of religious trusts
The Central Board of Indirect Taxes and Customs (CBIC) has clarified that no GST will be levied on the rent of rooms of inns run by religious and charitable institutions. In the month of June, the GST Council had decided that on booking of hotel rooms whose rent is less than one thousand rupees per day, GST will be levied at the rate of 12 percent.
Tags: business news in hindi, GST, GST latest news, GST latest news in hindi, Tour and Travels, train ticket
FIRST PUBLISHED : August 07, 2022, 12:48 IST