FHRAI asks govt to rationalise taxes in hospitality sector

18th June, 2014

On rationalisation of tax structure, FHRAI said: "Pending the introduction of a unified Goods & Services Tax (GST), hotel accommodation and air-conditioned restaurants should be included in the negative list for service tax."

The same base of room and food and beverages revenue is already subject to the levy of luxury tax and VAT by state governments and the additional imposition of service tax by the central government amounts to double-taxation, it added.

FHRAI also said the GST should subsume, without any exceptions, all central and state-level indirect levies (including luxury tax, entry tax etc) and a composite tax rate applicable to the tourism sector under GST to be capped at 8 percent.