Rent paid by Patients in hospital has been exempted from Goods and Services Tax (GST) By CS Gaurav Kumar


Dear Professional Colleagues,

There can be a good news for the next time if you come to use room in a hospital because any rent paid by patients for hospital rooms will be exempted from the Goods and Services Tax (GST). 
Issuing clarifications on levy of GST on the tariff for various accommodation services, the Central Board of Excise and Customs (CBEC) said the tax on rooms in the hotel, guest house or inns will be payable on the actual amount charged and not on declared or published tariff. 


The Central Board of Excise and Customs (CBEC) said the tax on rooms in the hotel, guest house or inns will be payable on the actual amount charged and not on declared or published tariff. Photo: HT

"Declared or published tariff is relevant only for the determination of the tax rate slab," the clarification issued in form of Frequently Asked Questions (FAQs) said.  

  • A 12 per cent tax will be levied on the tariff of more than Rs 1,000 and less than Rs 2,500
  • No GST is applicable on room tariffs of less than Rs 1,000.  

  • An 18 per cent levy would come in for room rents of between Rs 2,500 and Rs 7,500.  
  • A GST of 28 per cent will be charged on tariff greater than Rs 7,500.  
The tax will be levied on the entire amount, including charges for extra bed.  "GST rate would be determined according to the declared tariff for the room, and GST at the rate so determined will be levied on the entire amount charged from the customer,".


For room upgrades, the FAQs said the tax applicable on the higher category rooms will be charged on the actual tariff paid.  

  • "If declared tariff of the accommodation provided by way of an upgrade is Rs 10,000 but amount charged is Rs 7,000, then GST would be levied at the rate of 28 per cent on Rs 7,000,".
Tariff declared anywhere, like on websites through which business is being procured or printed on tariff card or displayed at the reception, will be the declared tariff.  
  • "In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST".
  • If different tariff is declared for different seasons or period of the year, the tariff declared for the seasons in which the service of accommodation is provided shall apply.
If you use in hospital services like serving of food or drinks, including by a bakery, it would attract 5 per cent GST rate under composition levy scheme. 

Author
CS Gaurav Kumar
Co-Founder: Compliance Calendar LLP
E-mail: founders@compliancecalendar.in

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