Hospital room rent kept out of GST ambit

Hospital room rents paid by patients are exempted from the Goods and Services Tax (GST), the government said on Tuesday in the latest clarification about the unified tax law.

The Central Board of Excise and Customs (CBEC) also said tax on rooms in hotels, guest house or inns will be payable on the actual amount charged.

It will not be on the declared or published tariff, which is relevant only for the determination of the tax rate slab, the clarification said. No GST is applicable on room tariffs of less than Rs 1,000. For tariffs between Rs 1,000 and Rs 2,500, the GST rate is 12 per cent. It is 18 per cent for room rents between Rs 2,500 and Rs 7,500, and 28 per cent on tariffs above Rs 7,500.

The tax will be levied on the entire amount, including charges for extra bed. GST rate will 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, it said. For room upgrades, 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, it said. Tariff declared anywhere, like on the website through which business is being procured or printed on tariff card or displayed at the reception, will be the declared tariff.

In case different tariffs are declared at different places, highest of them will be considered to calculate GST, it said. If a 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.

Also, under the composition scheme of GST, services such as serving food or drinks, including by a bakery, would attract 5 per cent GST. Tax rate on admission to entertainment events or access to amusement facilities would be 28 per cent.