New Delhi – The government confirmed that there would be no Goods and Services Tax (GST) charged to the patients for hospital rooms that are rented out. The central board of excise and customs issued clarifications regarding the levy of GST on the tariff for the different accommodation services.

The tax on hotel rooms, guest house or inns will be payable on the actual amount charged to the customers and not the declared or any published tariff.

Declared or published tariff is significant only for figuring out the tax slab rate, the answer issued in the frequently asked questions (FAQs) on the GSTN portal. Also, the government confirmed that there is no goods and services tax applicable on the room tariffs of less than ₹ 1,000. A 12% GST would be charged on the rooms that have a tariff of more than ₹ 1,000, but less than ₹ 2,500, whereas an 18% tax would be levied on the rooms that have a tariff greater than ₹ 2,500 but less than ₹ 7,500. A GST of 28% would be charged for rooms asking for tariffs higher than ₹ 7,500.
Also, the tax is expected to be charged on the entire amount. The entire amount would have factors such as let’s say charges for an extra bed have been charged.

The frequently asked questions confirmed that the tax applicable in cases of room upgrades would be on the actual tariff paid. For instance, if the declared tariff on the room is let’s say ₹ 10,000 but only ₹ 6,500 is charged to the concerned person, even then a GST of 28% would be levied on ₹ 6,500. The declared tariff would be something such as declared on the website, via which a business is being procured or any tariff printed on a tariff card or a tariff displayed at the reception.

In cases where different tariffs are declared at different places such as a website or reception, then the highest of such declared tariffs would be considered for the calculation of the GST. Also in cases where different tariffs are declared for different seasons or a particular period of the year, the tariffs declared for those particular seasons would apply if the service of accommodation is given in that dedicated period.

On the question where it was asked regarding the tax to be charged on rooms provided to inpatients, the answer confirmed that the room rents in hospitals had been exempted from the purview of the GST.

Under the composition levy scheme, any service of food or drinks such as a bakery would attract 5% GST for any service that it would provide during the course. Also, entries to casinos would attract a 28% GST and a similar amount of tax would be charged on the value of the betting as well.

All the entertainment events or any access to amusement facilities, theme parks, water parks, joy rides, casinos, race course or any sporting event like the Indian Premier League (IPL) would come under the 28% bracket of Goods and Services Tax.