Booking hotel is classifiable under SAC 998552
Hotel booking by a tour operator:
In many cases, tour operators arrange for a hotel room only. They may be doing only an isolated part of ths entire service and not delivering the whole tour. Now the question is where the booking of hotel is classifiable? can we classify it in tour operator service?
The services of the tour operator are chargeable to tax @5%. No ITC is allowed on this reduced rate. When it will be assumed that a tour is organized. It is also clarified by the notification no. 11/2017 , entry no. 23.
Related Topic:
GST SAC Code For Real Estate Services
“Explanation.- “tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.”
Observation by west bengal AAR in case of Golden Vacations Tours and Travels argued by CA Shubham Khaitan.
In this advance ruling same issue was discussed. The applicant sought the classification of booking of accommodation. Also, the eligibility of ITC for such entity was asked for. In this case, the authority held that the classification of accommodation by other than a hotel itself will fall heading SAC 998552.
“The support services covered under Sl No. 23(iii) of the Rate Notification include services classified under SAC 998552. Services covered under SAC 998552 include arranging reservations for accommodation services for domestic accommodation, accommodation abroad etc. The Applicant’s supply is specifically covered and, therefore, classifiable under SAC 998552. lt is, therefore, taxable under Sl No. 23(iii) of the Rate Notification, and the Applicant is eligible to claim the input tax credit as admissible under the law.”
Related Topic:
SAC Code & GST Rate for Accounting and Professional Services
Tour and travel industry is facing many issues in GST. Hope this particular ruling will clarify this particular dilemma.
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CA Shafaly Girdharwal
CA
New Delhi, India
CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.
