Earlier, when GST was introduced way back a year, there was a differential in the GST rate for dining out services at an AC or non-air conditioned AC outlet. While the air-conditioned service attracted 18% tax, the former arise a tax liability at the rate of 12%. But after a lot of confusion and concerns raised by the hospitality sector, the difference was brought down by charging 5% tax with the claim of Input Tax Credit (ITC) in November 2017.
Also, as a further clearance to the provision, as per one of the reports it is put forth that the GST Council has cleared that now there stands no differential in respect of GST being charged to in-house or outside customers. Also, only in a case when the restaurant is not located at the same place with lodging and accommodation services over Rs. 7,500, the GST at the rate of 5% would apply.
In case of lodging services, after a considerable representation by the different stakeholders in the hospitality industry, it has been decided that now the GST on accommodation and lodging services shall be charged to the transactional value as against the declared tariff.