New Delhi: Hotel rooms costing Rs 2,500-Rs 7,500 will be taxed at 18% while those above Rs 7,500 will attract levy of 28%, the government said on Sunday, finalising June 30 midnight for the countrywide roll out of the Goods and Servcies Tax (GST).
“GST on restaurants in these hotels will be at par with other air-conditioned restaurants, that is 18%,” finance minister Arun Jaitley said after a meeting of the GST council in Delhi. The council also fixed the tax of state-run lotteries at 12% and of state authorised lotteries at 28%.
“The official launch of the GST will take place on the midnight of June 30 and July 1 at a function in Delhi,” Jaitley added.
Hailed as the country’s biggest tax reform since Independence, GST will unify Asia’s third-largest economy into a common market, eliminating a string of central and state levies. The Narendra Modi government is keen to ensure a seamless transition to GST, which is expected to shore up state and federal tax revenues, cool inflation and accelerate economic growth by 1-2 percentage points in the medium term.
Industry lobby CII said on Sunday that India Inc is ready for the rollout of the pan-India indirect tax regime. “GST is the most significant indirect tax reform introduced in the country since Independence,” Confederation of Indian Industry Director-General Chandrajit Banerjee said in a statement, adding, “GST has been finalised after a collaborative and consultative approach and we look forward to its introduction.”
Organised retailers do not expect GST GST to impact their sales despite general fears that it could disrupt businesses, and hope to be fully ready for the uniform tax regime in the next few weeks.
“As GST will be rolled out from July 1, we have to be prepared. It will lead to better compliance and an organised way of doing things,” Ashwin Khasgiwala, chief financial officer at Reliance Retail, said.
“We are not anticipating any sales disruptions. Nobody has expressed concerns on that…For retailers, benefits will come as and when manufacturer change the prices, which we in turn will pass it on to consumers,” he added.
July onwards, large retail companies, including Reliance Retail, Future Group, Trent HyperCity and DMart, among others, are looking at aggressive price reductions.