Be prepared for a bigger hole in your pocket post GST. If you love travelling, it’s time to reassess your expenses because cost of hotel bills, airplane tickets, restaurant charges and entertainment services maybe different now.
Change in airfare
Under the new regime, the GST Council has lowered the tax rate for economy class flight tickets to 5% from 6% in the pre GST period. However, the business class tickets will now attract a higher tax at 12% after GST implementation. In the pre GST period, a business class ticket attracted 9% GST.
GST on hotel stays and restaurants
- Restaurants having turnover upto 75 lakhs can opt to pay GST under Composition Scheme at the rate of 5%.
- Non-AC restaurants who do not serve alcoholic liquor: 12% tax.
- AC restaurants and restaurants serving alcoholic liquor: 18% tax.
- Accomodation in hotels, inn, guest house, etc. with tariffs less than INR 999: NIL
- Accomodation in hotels, inn, guest house, etc. with tariffs between INR 1,000- INR 2,499: 12% tax.
- Accomodation in hotels, inn, guest house, etc. with tariffs between INR 2,500- INR 7,499: 18% tax
- Accomodation in hotels, inn, guest house, etc. with tariffs INR 7,500 or above: 28% tax
If you are planning to stay in an affordable hotel, then you have all the reasons to cheer up because it will be affordable on your pocket too. Hotels and lodges with 18% GST may compensate in terms of better service.
GST on drinks
Waters, including natural or artificial mineral waters and aerated- not added other sweetening matter nor flavored is taxed at 18% under GST. Hence, the GST rate for packaged mineral water is fixed at 18%.
On the other hand, the following types of drinks are taxed at 12% GST:
- Soya milk drinks
- Fruit pulp or fruit juice based drinks
- Tender coconut water put up in unit container and bearing a registered brand name
- Beverages containing milk
The following types of drinks and beverages are taxed at 28% under GST:
- Other non-alcoholic beverages
- Aerated containing waters, added other sweetening matter or sugar or flavored
Tea and coffee is taxable under 5% GST.
Travel insurance
Travel insurance will be charged at 18% GST as compared to a charge of 15% earlier.
Credit cards
18% GST would be charged on credit card services such as, processing charge, interest issuance, renewal etc. This is higher as compared to 15% service tax charged earlier.
Phone and internet bill
Telecom services, until advent of GST, attracted 15 per cent services tax. However under GST, it will attract tax at the rate of 18 per cent. So if you’re a post-paid subscriber currently paying INR 1,000, you’ll be charged INR 30 extra every month and If you’re a pre-paid subscriber, you can expect your talk-time to stumble. If, for instance, you’re buying a INR 100 pack, you are likely to get about INR 80.96 talk-time as against INR 83.96 now for the same price.
Cab bookings
Cab will now cost slightly lesser as the tax rate has come down to 5% from the previous rate of 6%.
