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Project Report On (IMPACT OF GST ON HOTEL AND TOURISM INDUSTRY) Submitted

by (VIGHNESH SATYAVAN CHAVAN) Roll NO: 227 Submitted to UNIVERSITY OF

MUMBAI MASTER OF COMMERCE (ACCOUNTANCY / MANAGEMENT) Semester- III /

IV (2021–22) Project Guidance by Professor: (UDAY SHETTY) UTTARI BHARTI 15

SABHA’S RAMANAND ARYA D.A.V COLLEGE OF COMMERCE AND SCIENCE DATAR

COLONY, BHANDUP (EAST) 1

RamanandArya D.A.V. College Bhandup (East) Mumbai 400042 Certificate This is to

certify that (VIGHNESH SATYAVAN CHAVAN )has worked and duly completed his/her

Project Work for the degree of Master in Commerce under the Faculty of Commerce in the

subject of (FINANCIAL ACCOUNTING) and his/her project is entitled, 1 (IMPACT OF

GST ON HOTEL AND TOURISM INDUSTRY)under my supervision. I further certify that

the entire work has been done by the learner under my guidance and that no part of it has

been submitted previously for any Degree or Diploma of any University. It is his/her own

work and facts reported by her/his personal findings and investigations. Co-Ordinator:

Principal: DR. AJAY M. BHAMARE Project Guide/Internal Examiner: External Examiner: 2

RamanandArya D.A.V. College Bhandup (East) Mumbai 400042 Declaration by learner I,

the undersigned (VIGHNESH SATYAVAN CHAVAN )declare that the work embodied in

this project work hereby, titled (IMPACT OF GST ON HOTEL AND TOURISUM

INDUSTRY), forms my own contribution to the research work carried out under the

guidance of(UDAY SHETTY) is a result of my own research work and has not been

previously submitted to any other University for any other Degree to this or any other

University. Wherever reference has been made to previous works of others, it has been

clearly indicated as such and included in the bibliography. I, here by further declare that all

information of this document has been obtained and presented in accordance with

academic rules and ethical conduct. Name of the learner: Signature: Certified by Name

of the Guiding Teacher: Signature: 3

and the depth is so enormous. I would like to acknowledge the following as being idealistic

channels and fresh dimensions in the completion of this project. I take this opportunity to

thank the University of Mumbai for giving me chance to do this project. I would like to thank

my Principal, Dr. Ajay M. Bhamarefor providing the necessary facilities required for

completion of this project. I take this opportunity to thank our Coordinator (NAME OF

COORDINATOR), for her moral support and guidance. I would also like to express

my sincere gratitude towards my project guide (UDAY SHETTY)whose guidance and care

made the project successful. I would like to thank my College Library, for having provided

various reference books and magazines related to my project. Lastly, I would like to thank

each and every person who directly or indirectly helped me in the completion of the project

especially my Parents and Peers who supported me throughout my project. Signature of

the Student (VIGHNESH SATYAVAN CHAVAN ) 4

INDEX Sr. No. Chapter Title of the Chapter Page No. 1 Chapter - 01 Introduction 2

Chapter - 02 Research Methodology 3 Chapter -03 Literature Review 4 Chapter - 04 Data

Analysis and Interpretation 5 Chapter - 05 Conclusion & Suggestions 6 Chapter – 06

Reference 7 Chapter - 07 Bibliography 8 Chapter - 08 QUESTIONNAIRE 6

CONTENT Chapter No. Introduction Pages 1 1.1 Introduction 10 1.2 INTRODUCED GST

11 1.3 Status of GST in India 13 1.4 HISTORY OF GST IN INDIA 16 1.5 About Goods and

Services Tax Network (GSTN) 21 1.6 GST Council meeting 22 1.7 Salient features of GST

are as under 27 1.8 OBJECTIVES OF GST 28 1.9 TYPE OF GST 29 1.10 Overview on

Impact of GST in Hotel Industry 32 1.11 GST IMPACT ON OUR REGULAR FOOD BILL 33

1.12 Hotel industry 35 1.13 Impact of GST On hotel sector 37 1.14 Tax rate under GST for
hotels and restaurant. 39 1.15 Booking a hotel after GST rollout 40 Research methodology

2.1 Introduction of Research Methodology 43 2.2 RESEARCH DESIGN 44 2.3 GST on

Hotel Industry 47 2.4 SCOPE OF THE STUDY 49 2.5 OBJECTIVES OF THE STUDY 51

2.6 Limitation of the study 52 2.7 Meaning of Hypothesis 52 Chapter no. Literature Review

53 Chapter no. Data Analysis and Interpretation 57 Chapter no. Conclusion 70 7

Introduction to hotel and tourism industry A hotel is an establishment that provides

paid lodging on a short-term basis. 6 Facilities provided inside a hotel room may range

from a modest-quality mattress in a small room to large suites with bigger, higher-quality

beds, a dresser, a refrigerator and other kitchen facilities, upholstered chairs, a flat screen

television, and en-suite bathrooms. Small, lower-priced hotels may offer only the most

basic guest services and facilities. Larger, higher-priced hotels may provide additional

guest facilities such as a swimming pool, business centre (with computers, printers, and

other office equipment), childcare, conference and event facilities, tennis or basketball

courts, gymnasium, restaurants, day spa, and social function services. Hotel rooms are

usually numbered (or named in some smaller hotels and B&Bs to allow guests to identify

their room. Some boutique, high-end hotels have custom decorated rooms. Some hotels

offer meals as part of a room and board arrangement. In Japan capsule hotels provide a

tiny room suitable only for sleeping and shared bathroom facilities. . 9 Tourism means

people traveling for fun and adventure.It includes activities such as sightseeing

and camping People who travel for fun are called "tourists". Places where many tourists

stay are sometimes called "resorts". Places that people go to for tourism are called

tourist destinations. ● Transport; such as airlines,railways,boats and road transport. ●

Places to stay; such as hotels, camping grounds or parks, youth hostels, and bed and

breakfasts. ● 14 Food and drink; such as restaurants cafes and bars. ● Tour guide show

people supply local knowledge of a place. 9

1 Introduction to GST India, as world’s one of the biggest democracies in the world,

follows the federal tax system for levy and collection of various taxes. Different types of

indirect taxes are levied and collected at different points in the supply chain. The Centre

and the States are empowered to levy respective taxes as per the Constitution of India.

The Value-added tax (VAT), when introduced, was considered to be a major improvement

over the pre-existing central excise duty at the national level and the sales tax at the state

level. Now the Goods and Service Tax (GST) has been a further significant breakthrough –

the next logical step towards a comprehensive indirect tax reform in the country. The

Goods and Services Tax (GST) has been the biggest and substantial indirect tax reform in

India since 1947. The main idea of GST was to replace the then existing taxes like value-

added tax, excise duty, service tax and sales tax. GST as it is known as all set to be a

game changer for the Indian economy. GST was launched at midnight on 1st July 2017 by

the president of India, Pranab Mukherjee and Prime Minister, Narendra Modi. The launch

was marked by a historic midnight session of both houses of the Parliament convened at

the central hall of the Parliament. The 122nd Amendment Act Bill sought to amend the

constitution to introduce the GST wide proposed new article 246A. This new article gave

power to Legislature of every state and Parliament to make laws with respect to GST

where the supplies of goods or of services take place. GST has been applicable

throughout India, and has replaced multiple cascading taxes levied by the Central and

State Government. GST is levied at all stages right from manufacture/import of goods up to

final consumption with credit of taxes paid at previous stages available as credit against

output tax liability arising out of the outward supply ( popularly known as seamless flow of

credit of taxes). In a nutshell, only value addition is to be taxed and burden of tax is to be

borne by the final consumer. 11

4 STATUS OF GST IN INDIA GST was implemented to overcome various problems with

the existed tax system that was running for long time in the country and there were a larger

number of professional and tax authority was also much familiar and having expertise in

this field, even the process was less digital but the taxpayer and authority was having

command on the procedural aspect of the taxation. One of the biggest loss here is that

GST is new to us and GST Authority itself are not enough competent to overcome the

obstacle taxpayer facing and there is also lack of professional in the market to advise the

clients how to interpret the specific law of GST and save itself from legal action that can be

taken by the govt. against the taxpayers. Since the GST has widen its base by around 85%

which is covering the SMEs located in backward areas and rural side and they don’t want

to comply the provision in the hope that compliances will increase their cost and burden.

They are not hiring the qualified professional for compliances which is resulting in more

errors in their return and leading to cancelation of registration. The main motto of GST

launching was to eliminate the multiple procedures and multiple tax structure from the

economy but the same problems still existed in the new system. There is multitude of tax

rate ranging 5%, 12%, 18% and 28% and requiring multiple procedure and multiple

compliances to be adhered to which is not a sign of smoothening the business process in

India. International Monetary Fund (IMF) has also advised the govt. to simplify the GST

process to smoothen the business. In GST regime most of the products which are of

necessary use for public at large are covered under 18% tax slab which is resulted in

reduction of price because in pre GST regime there were multiple taxes imposed reaching

up to 32% around. Other tax slab is 28% which is covering luxury and sin goods and is the

great source of revenue for the govt. Out of total state in India around 14 state showing

increases in their revenue as compared to pre GST regime and there is no need to fill the

revenue gap by the central govt. to state govt. Further there are a no of weakness in the

GST system from which taxpayer struggling alike return filing and reconciliation system of
GSTN Network. Report this ad We can conclude that at present there are various issues

with GST but the govt. is seeing bright future ahead. Government is trying to simply the

GST to overcome the present issue and to exhibit the belief of taxpayer on the new GST

system. 13

HISTORY 2 OF GST IN INDIA Formation The reform of India's indirect tax regime was

started in 1986 by Vishwanath Pratap Singh, Finance Minister in Rajiv Gandhi’s

government, with the introduction of the Modified Value Added Tax (MODVAT).

Subsequently, Prime Minister P V Narasimha Rao and his Finance Minister Manmohan

Singh, initiated early discussions on a Value Added Tax (VAT) at the state level. A single

common "Goods and Services Tax (GST)" was proposed and given a go-ahead in 1999

during a meeting between the Prime Minister Atal Bihari Vajpayee and his economic

advisory panel, which included three former RBI governors IG Patel, Bimal Jalan and C

Rangarajan.Vajpayee set up a committee headed by the Finance Minister of West Bengal

Asim Dasgupta to design a GST model. The Asim Dasgupta committee which was also

tasked with putting in place the back-end technology and logistics (later came to be known

as the GST Network, or GSTN, in 2015). It later came out for rolling out a uniform taxation

regime in the country. In 2002, the Vajpayee government formed a task force under Vijay

Kelkar to recommend tax reforms. In 2005, the Kelkar committee recommended rolling out

GST as suggested by the 12th Finance Commission. After the defeat of the BJP-

led NDA government in the 2004 Lok Sabha election and the election of a Congress-

led UPA government, the new Finance Minister P Chidambaram in February 2006

continued work on the same and proposed a GST rollout by 1 April 2010. However, in

2011, with the Trinamool Congress routing CPI(M) out of power in West Bengal Asim

Dasgupta resigned as the head of the GST committee. Dasgupta admitted in an interview

that 80% of the task had been done. The UPA introduced the 115th Constitution

Amendment Bill on 22 March 2011 in the Lok Sabha to bring about the GST. It ran into

opposition from the Bharatiya Janata Party and other parties and was referred to a
Standing Committee headed by the BJP's former Finance Minister Yashwant Sinha. The

committee submitted its report in August 2013, but in October 2013 Gujarat Chief

Minister Narendra Modi raised objections that led to the bill's indefinite postponement.The

Minister for Rural Development Jairam Ramesh attributed the GST Bill's failure to the

"single handed opposition of Narendra Modi". 14

In the 2014 Lok Sabha election the Bharatiya Janata Party (BJP)-led NDA government was

elected into power. With the consequential dissolution of the 15th Lok Sabha the GST Bill –

approved by the standing committee for reintroduction – lapsed. Seven months after the

formation of the then Modi government the new Finance Minister Arun Jaitley introduced

the GST Bill in the Lok Sabha where the BJP had a majority. In February 2015, Jaitley set

another deadline of 1 April 2017 to implement GST. In May 2016, the Lok Sabha passed

the Constitution Amendment Bill, paving way for GST. However, the Opposition, led by the

Congress, demanded that the GST Bill be again sent back for review to the Select

Committee of the Rajya Sabha due to disagreements on several statements in the Bill

relating to taxation. Finally, in August 2016, the Amendment Bill was passed. Over the next

15 to 20 days, 18 states ratified the Constitution amendment Bill and the President Pranab

Mukherjee gave his assent to it. A 21-member selected committee was formed to look into

the proposed GST laws..After GST Council approved the Central Goods and Services Tax

Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The IGST

Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods

and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill), these

Bills were passed by the Lok Sabha on 29 March 2017. The Rajya Sabha passed these

Bills on 6 April 2017 and were then enacted as Acts on 12 April 2017. Thereafter, State

Legislatures of different States have passed respective State Goods and Services Tax

Bills. After the enactment of various GST laws, Goods and Services Tax was launched all

over India with effect from 1 July 2017. The Jammu and Kashmir state legislature passed

its GST act on 7 July 2017, thereby ensuring that the entire nation is brought under a
unified indirect taxation system. There was to be no GST on the sale and purchase of

securities. That continues to be governed by Securities Transaction Tax (STT). 15

Implementation The GST was launched at midnight on 1 July 2017 by the President

of india and the government of india. The launch was marked by a historic midnight (30

June – 1 July) session of both the houses of parliament convened at the Central Hall of the

Parliament. Though the session was attended by high-profile guests from the business and

the entertainment industry including Ratan tata, it was boycotted by the opposition due to

the predicted problems that it was bound to lead for the middle and lower class Indians.

The tax was strongly opposed by the opposing Indian National Congress. It is one of the

few midnight sessions that have been held by the parliament - the others being the

decleration of india’s independence on 15 August 1947, and the silver and golden

jubblies of that occasion. After its launch, the GST rates have been modified multiple

times, the latest being on 22 December 2018, where a panel of federal and state finance

ministers decided to revise GST rates on 28 goods and 53 services. Members of the

congress boycotted the GST launch altogether. They were joined by members of

the Trinamool congress, comunist party of india, and the DMK. The parties reported that

they found virtually no difference between the GST and the existing taxation system,

claiming that the government was trying to merely rebrand the current taxation

system. They also argued that the GST would increase existing rates on common daily

goods while reducing rates on luxury items, and affect many Indians adversely, especially

the middle, lower middle and poorer income groups. 16

1 REVERSE CHARGE MECHANISM (RCM) ON SECURITY SERVICES w.e.f. 1st

January, 2019 RCM is one of the method to collect indirect taxes by the Government,

under which a recipient (i.e. Buyer) who procures goods or services is required pay the

taxes directly to tax authorities. As per Notification No. 13/2017- Central Tax (Rate) dated

28th June, 2017, the Central Government on the recommendations of the Council notified
certain categories of supply of services on which central tax shall be paid on reverse

charge basis by the recipient of the services w.e.f. 1st day of July, 2017. While exercising

the powers conferred by sub-section (3) of section 9 of the Central Goods and Services

Tax Act, 2017, the Central Government, on the recommendations of the Council, made

amendment in the Notification No.13/2017- Central Tax (Rate), dated the 28th June, 2017

vide Notification No. 29/2018- Central Tax (Rate) dated 31st December, 2018 brought

RCM on Security Services provided to a registered person by any person other than a

body corporate w.e.f. 1st day of January, 2019. e.g. 17

Exceptions:However these provisions will not apply to: (i) (a) a Department or

Establishment of the Central Government or State Government or Union territory; or (b)

local authority; or (c) Governmental agencies; which has taken registration under the

Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting

tax under section 51 of the said Act and not for making a taxable supply of goods or

services; (TDS Purpose) or (ii) a registered person paying tax under section 10.

(Composition Dealer) The year 2017 will forever be etched in Indian history as the year

that saw the implementation of the biggest and most important economic reform since

Independence - the Goods and Services Tax (GST). The reform that took more than a

decade of intense debate was finally implemented with effect from 1 July 2017, subsuming

almost all indirect taxes at the Central and State levels. GST, which was publicised as ‘one

nation, one tax’ by the government, aims to provide a simplified, single tax regime in line

with the tax framework applicable in several major economies across the Globe. This

single tax has helped streamline various indirect taxes and brought in more efficiencies in

business. GST law in India is a comprehensive, multi-stage, destination-based tax that is

levied on every value addition. The implementation of the GST got overwhelming support

from the industry. The industry took this as an opportunity to redefine supply-chain model,

customise IT processes, and evaluate internal and external arrangements to safeguard

interest and minimise their tax costs. As the GST journey progressed, there was a growing
realisation of its far-reaching impact. Industry faced various challenges, ranging from new

and unique concepts, complex documentation, the high rates of certain goods and services

to complex or unclear treatment of several common transactions. The matching concept for

claiming credits, adverse and contrary advance rulings, clarity on aspects relating to Anti-

Profiteering, GST refunds etc. are some of the some of the emerging challenges that the

businesses be mindful of. However, it should also be appreciated that the authorities have

been quick to address public concerns by issuing a series of notifications, clarifications,

press releases and FAQs, to resolve a wide range of issues. . 18

There is hope that GST 2.0, which is at the works currently, will be a much improved

version compared to the first one. The government has come out with new return filing

process. There have been multiple reduction in tax rate for various goods. With the

objective to curb tax evasion, the government has also introduced the E-way bill system

across India, to track movement of goods 19

Levy of GST:⮚ It is a dual levy with State/union territory GST and Central GST.⮚ Intra –

state supplies attract CGST + SGST/UTGST.⮚ Intra – state supplies IGST which is the

sum total of CGST and SGST/UTGST. Exclusions under GST:⮚ Basic customs duty on

import of goods into India.⮚ Petroleum products (petrol, diesel, ATF, natural gas and crude

oil)⮚ Alcohol for human consumption.⮚ Stamp duty and Real Estate. 20

HISTORY OF GST IN INDIA India's biggest tax reform in the 70 years of independence is

implementation of GST (Goods and Services Tax), which will help modernise India as

Asia's third largest economy. The 17-year-old dream of GST in India unify the US $2 trillion

economy with 1.3 billion people into a single market. Nationwide Goods and Services Tax

(GST) has came into effect from 1 July, 2017. This is the marvelous way for a new

Common National Market and replaced several cascading indirect taxes levied by the

central and state governments. World’s first country implemented GST is France (in the
year 1954). More than 160 countries have implemented GST system. Framework of GST

in India had formed 17 years ago. The first move on GST implementation in India was

began on July 17, 2000, under Vajpayee Government. In 12 August 2016, Assam became

the first state to pass GST. On September 23, 2016, GST Network was formed, it is an

online network designed to solve the problems and questions of consumers and

businessmen. 21

History of GST in India - Detailed Events: The detailed events according to various

timelines for GST implementation in India is granted below:⮚ During 1999:The idea of

Goods and Services Tax (GST) in India started during meeting held in 1999 between

Prime Minister Atal Bihari Vajpayee and his economic advisory panel, which included three

former RBI governors namely IG Patel, Bimal Jalan and C Rangarajan.⮚ 2000: In India,

the idea of adopting GST was first suggested by the Atal Bihari Vajpayee Government in

2000. The state finance ministers formed an Empowered Committee (EC) to create a

structure for GST, based on their experience in designing State VAT. Representatives from

the Centre and states were requested to examine various aspects of the GST proposal and

create reports on the thresholds, exemptions, taxation of inter-state supplies, and taxation

of services. The committee was headed by Asim Dasgupta, the finance minister of West

Bengal. Dasgupta chaired the committee till 2011.⮚ 2004: A task force that was headed by

Vijay L. Kelkar the advisor to the finance ministry, indicated that the existing tax structure

had many issues that would be mitigated by the GST system.⮚ February 2005: The

finance minister, P. Chidambaram, said that the medium-to-long term goal of the

government was to implement a uniform GST structure across the country, covering the

whole production-distribution chain. This was discussed in the budget session for the

financial year 2005-06.⮚ February 2006: The finance minister set 1 April 2010 as the GST

introduction date.⮚ November 2006: Parthasarthy Shome, the advisor to P. Chidambaram,

mentioned that states will have to prepare and make reforms for the upcoming GST

regime.⮚ February 2007: The 1 April 2010 deadline for GST implementation was retained
in the union budget for 2007-08 22

⮚ February 2008: At the union budget session for 2008-09, the finance minister confirmed

that considerable progress was being made in the preparation of the roadmap for GST.

The targeted timeline for the implementation was confirmed to be 1 April 2010.⮚ July

2009: Pranab Mukherjee, the new finance minister of India, announced the basic skeleton

of the GST system. The 1 April 2010 deadline was being followed then as well.⮚

November 2009: The EC that was headed by Asim Dasgupta put forth the First Discussion

Paper (FDP) , describing the proposed GST regime. The paper was expected to start a

debate that would generate further inputs from stakeholders⮚ February 2010: The

government introduced the mission-mode project that laid the foundation for GST. This

project, with a budgetary outlay of Rs.1,133 crore, computerised commercial taxes in

states. Following this, the implementation of GST was pushed by one year.⮚ March 2011:

The government led by the Congress party puts forth the Constitution (115th Amendment)

Bill for the introduction of GST. Following protest by the opposition party, the Bill was sent

to a standing committee for a detailed examination.⮚ June 2012: The standing committee

starts discussion on the Bill. Opposition parties raise concerns over the 279B clause that

offers additional powers to the Centre over the GST dispute authority.⮚ November 2012:

P. Chidambaram and the finance ministers of states hold meetings and set the deadline for

resolution of issues as 31 December 2012.⮚ February 2013: The finance minister, during

the budget session, announces that the government will provide Rs.9,000 crore as

compensation to states. He also appeals to the state finance ministers to work in

association with the government for the implementation of the indirect tax reform. 23

⮚ August 2013: The report created by the standing committee is submitted to the

parliament. The panel approves the regulation with few amendments to the provisions for

the tax structure and the mechanism of resolution.⮚ October 2013: The state of Gujarat

opposes the Bill, as it would have to bear a loss of Rs.14,000 crore per annum, owing to
the destination-based taxation rule.⮚ May 2014: The Constitution Amendment Bill lapses.

This is the same year that Narendra Modi was voted into power at the Centre.⮚ December

2014: India’s new finance minister, Arun Jaitley, submits the Constitution (122nd

Amendment) Bill, 2014 in the parliament. The opposition demanded that the Bill be sent for

discussion to the standing committee.⮚ February 2015: Jaitley, in his budget speech,

indicated that the government is looking to implement the GST system by 1 April 2016.⮚

May 2015: The Lok Sabha passes the Constitution Amendment Bill. Jaitley also

announced that petroleum would be kept out of the ambit of GST for the time being.⮚

August 2015: The Bill is not passed in the Rajya Sabha. Jaitley mentions that the

disruption had no specific cause.⮚ March 2016: Jaitley says that he is in agreement with

the Congress’s demand for the GST rate not to be set above 18%. But he is not inclined to

fix the rate at 18%. In the future if the Government, in an unforeseen emergency, is

required to raise the tax rate, it would have to take the permission of the parliament. So, a

fixed rate of tax is ruled out. 24

⮚ June 2016: The Ministry of Finance releases the draft model law on GST to the public,

expecting suggestions and views.⮚ August 2016: The Congress-led opposition finally

agrees to the Government’s proposal on the four broad amendments to the Bill. The Bill

was passed in the Rajya Sabha.⮚ September 2016: The Honourable President of India

gives his consent for the Constitution Amendment Bill to become an Act.⮚ 2017: On 16

January, 2017, Jaitley announces 1 July, 2017 as GST rollout deadline. On 20 March,

2017, Cabinet approved CGST, IGST and UT GST and Compensation bills. On 27 March,

2017, Lok Sabha and Rajya Sabha pass all the four key GST Bills - Central GST (CGST),

Integrated GST (IGST), State GST (SGST) and Union Territory GST (UTGST). On 18 May,

2017, the GST Council fits over 1,200 goods in one of the four rates of GST (5%, 12%,

18%, 24%). On 19 May, 2017, the GST Council decides on 5, 12, 18 and 28 percent as

service tax slabs. On 20 May, 2017, GST Council fixed four GST tax rates in India (5%,

12%, 18%, 24%) for all goods and services. During Midnight of 30 June, 2017 - GST came
into force across India except Jammu & Kashmir.During Midnight of 7 July, 2017 - Jammu

and Kashmir, the only State missed to adopt the Goods and Services Tax (GST) on July 1,

finally joined the GST 25

26

About Goods and Services Tax Network (GSTN): "Goods and Services Tax" Network

(GSTN) is a non-profit organisation, set up by the Government as a private company under

erstwhile Section 25 of the Companies Act, 1956. The main purpose of GSTN is to create

a website/platform for all the GST related concerned parties, namely stakeholders,

government and taxpayers to collaborate on a single portal. GSTN would provide three

front end services, namely registration, payment and return to taxpayers. Besides providing

these services to the taxpayers, GSTN would be developing back-end IT modules for 25

States. Infosys is appointed as Managed Service Provider (MSP) at a total project cost of

around Rs 1380 crores for a period of five years. Goods and Services Tax Network

(GSTN) has selected 34 IT, ITeS and financial technology companies, to be called GST

Suvidha Providers (GSPs). GST Rate Classification: ▪ 0% - Essential food and medicines,

newspaper, education services, residential accommodation. ▪ 0.25% - Diamonds, other

precious stones. ▪ 3% - Gold, silver, platinum, articles of jewellery. ▪ 5% - Common use

items, sweets, restaurant services, goods transport services. ▪ 12% - Frozen meat, butter

and cheese, Namkeens, Milk beverages. ▪ 18% - Standard rate for goods and services. ▪

28% - Luxury and sin goods such as motor vehicles (additional cess imposed on certain

luxury goods) 27

28

GST Council meeting: The GST Council met for the 31st time on 22nd December 2018,

Saturday at Vigyan Bhavan, New Delhi. It was chaired by the Finance Minister Shri Arun
Jaitley. Highlights were Rate tweaks, relief in the form of due date extensions, clarity on

GST 2.0 Implementation and streamlining of GST compliance like return filing, registration

and refund procedure on the portal. . GST Rates rationalised: ● Today’s GST rates

reduction will have an overall impact on revenue of Rs 5500 crore, said Jaitley. ●

Recommendations made by the Fitment committee reports have been taken into

consideration in today’s meet. ● No change in tax rate on Cement: 13 items of automobile

parts, 8 items of the cement industry still remain under 28 %GST Slab. ● Third party

insurance lowered to 12 per cent GST Slab from the earlier 18%. ● 6 goods and 1 service

have been removed from the 28 % GST Slab tax bracket under the Good Services Tax

(GST) regime. 29

● GST for cinema tickets being less than Rs 100 has a reduced tax rate from 18% to 12%

GST Slab, for tickets equal to or above Rs 100, GST reduced from 28% to 18%. ● Lithium-

ion batteries charges, video games consoles, small sport related items, accessories for

carriages for disabled removed from 28% slab. ● Items claimed to be used by the upper

segments such as Air conditioners, dishwashers will remain at 28% GST Slab. ● Bank

charges (savings bank), and PradhanMantri Jan DhanYojana has been exempted from

GST. ● GST rate on special flights for pilgrims slashed for the economy to 5 per cent and

business class to 12 per cent. These include travel by non-scheduled/chartered operations

for religious pilgrimage, which is facilitated by Go I under bilateral agreements. Broadly, the

expectations of 31st GST Council meeting were: ● Deliberations on announcing GST rates

on Petrol and Diesel. ● GST Rate cut highly likely for Housing sector with two proposals

before the Council: 1. To slash GST rate from the existing 12% to 8%, in order to bring it at

par with the affordable housing with ITC claim option 2. To slash the GST rate to 5%

without the ITC claim option ● Decision to be taken on the reports submitted by the sub-

committees formed for analysing GST on Sugar and Cess in case of exigencies. ●

Speculations are high that the council is expected to discuss the proposal in what could

effectively slash tax rate from the highest tax slab of 28% to 18%. Goods such as cement,
computer monitor and power banks and services like third-party vehicle insurance are

going to face rate cuts. The intention seems to be to rationalise GST rates excluding items

from the 28 per cent slab and restrict the same to sin goods or luxury goods. ● Decision on

simplification of GSTR-9 Annual returns 30

Salient features of GST are as under: i. GST would be applicable on sale of goods and

services as against the present concept of tax on the manufacture of goods. ii. GST would

be destination based tax as against the present concept of origin based tax. iii. It would be

a dual GST. The GST levied by the Centre would be called Central GST (CGST) and that

to be levied by the states would be called State GST (SGST). iv. An Integrated GST (IGST)

would be levied on inter-state supply of goods or services. This would be collected by the

centre. v. Import of goods or services would be treated as inter-state supplies and would

be subject to IGST in addition to applicable custom duties. vi. GST would replace the

following taxes currently levied and collected by the Centre: a) Central Excise Duty

(including additional Duties of Excise) b) Service Tax. c) CVD (levied on imports in lieu of

Excise Duty) d) SACD (levied on imports in lieu of VAT) e) Central Sales Tax (CST) f)

Excise Duty levied on Medicinal & Toiletries preparations. g) Surcharges and cesses. vii.

State taxes that would be subsumed within GST are: a) VAT/ Sales Tax b)

Entertainment Tax c) Luxury Tax d) Taxes on Lottery, betting and gambling.

e) Surcharges & Cesses. 31

viii. GST would apply to all goods & services except Alcohol for human consumption,

Electricity and Real Estate. ix. The list of exempted goods & services would be kept to a

minimum and would be harmonised for the Centre and States as far as possible. x. The

credit would be permitted to be utilised in the following manner: a) ITC of CGST allowed

for payment of CGST & IGST in that order. b) ITC of SGST allowed for payment of SGST

& IGST in that order. c) ITC of IGST allowed for payment of IGST, CGST & SGST in that

order 32
OBJECTIVES OF GST⮚ Ensuring that the cascading effect of tax on tax will be

eliminated.⮚ Improving the competitiveness of the original goods and services, thereby

improving the GDP rate too.⮚ Ensuring the availability of input credit across the value

chain.⮚ Reducing the complications in tax administration and compliance.⮚ Making a

unified law involving all the tax bases, laws and administration procedures across the

country.⮚ Decreasing the unhealthy competition among the states due to taxes and

revenues. Reducing the tax slab rates to avoid further clarification issues. 33

34

TYPE OF GST Hence, you can say that there are four types of GST: ▪ Central Goods and

Services Tax ▪ State Goods and Services Tax ▪ Integrated Goods and Services Tax ▪

Union Territory Goods and Services Tax CGST full form is Central Goods and Services

Tax. CGST refers to the Central GST tax that is levied by the Central Government of India

on any transaction of goods and services tax taking place within a state. It is one of the two

taxes charged on every intrastate (within one state) transaction, the other one being SGST

(or UTGST for Union Territories). CGST replaces all the existing Central taxes including

Service Tax, Central Excise Duty, CST, Customs Duty, SAD, etc. The rate of CGST is

usually equal to the SGST rate. Both taxes are charged on the base price of the product.

See the example below to understand it better. e.g. – In the example above, when Suresh

sales a product to Pradeep in the same state (Rajasthan), he has to pay two taxes. CGST

is for the central government while SGST is for the state. The rate of CGST is 9%, same as

SGST. After the application of CGST (9% of Rs 10,000), the final cost of the product will

become Rs 11,800 35

SGST full form is State Goods and Services Tax. SGST (State GST) is one of the two

taxes levied on every intrastate (within one state) transaction of goods and services. The
other one is CGST. SGST is levied by the state where the goods are being sold /

purchased. It will replace all the existing state taxes including VAT, State Sales Tax,

Entertainment Tax, Luxury Tax, Entry Tax, State Cesses and Surcharges on any kind of

transaction involving goods and services. The State Government is the sole claimer of the

revenue earned under SGST. Let’s understand this with an example. e.g. – Suresh from

Rajasthan wants to sell some goods to Pradeep in Rajasthan. The product, originally

priced at Rs 10,000, will attract GST at 18% rate comprising of 9% CGST rate and 9%

SGST rate. The SGST tax amount here is Rs 900 (9% of Rs 10,000) which is fully claimed

by the Rajasthan State Government. The rate of the product after SGST will be Rs 10,900.

IGST full form is Integrated Goods and Services Tax. Integrated GST (IGST) is applicable

on interstate (between two states) transactions of goods and services, as well as on

imports. This tax will be collected by the Central government and will further be distributed

among the respective states. IGST is charged when a product or service is moved from

one state to another. IGST is in place to ensure that a state has to deal only with the Union

government and not with every state separately to settle the interstate tax amounts. Let’s

try to understand IGST with an example. e.g., – Ramesh is a manufacturer in Rajasthan

who sold goods worth Rs 10,000 to Suresh in Rajasthan. Since it is an interstate

transaction, IGST will be applicable here. Let’s assume the GST rate is 18% for the

particular item. So, the IGST amount charged by the Central Government will be Rs 1800

(18% of Rs 10,000), and the refined rate of the product will be Rs 11,800. UTGST full form

is Union Territory Goods and Services Tax. The Union Territory Goods and Services Tax,

commonly referred to as UTGST, is the GST applicable on the goods and services supply

that takes place in any of the five Union Territories of India, including Andaman and

Nicobar Islands, Dadra and Nagar Haveli, Chandigarh, Lakshadweep and Daman and Diu.

This UTGST will be charged in addition to the Central GST (CGST) explained above. For

any transaction of goods/services within a Union Territory: CGST + UTGST 36

Overview on Impact of GST in Hotel Industry: The restaurant industry has regularly been
under the scanner since demonetization. This industry in India is on constant growth and is

now impacted with GST – Goods and service tax. Hence, we thought of giving you a

detailed impact analysis about GST on the restaurant industry. If we talk of GST in simple

terms, it is going to make luxury restaurants unhappy since they are likely to be more

impacted and will have to pay whopping 28% GST tax. Our goal in this article is to

elaborate how restaurant food bills will look with the effect of GST. We will also see how

end consumer will pay with the GST effect. If we look at the current statistics of

the restaurant market industry, as per Indian Food Service Report 2016 it is estimated to

be worth 3.09 Lakh Crore. The report also stated that the food market of the country has

directly employed more than 5.8 million in 2016. One of the key contributors to this growth

is the middle-class sector of the country. With access to the lifestyle adopted by western

countries, women empowerment gaining stand, high disposable income and reliable

mobile network availability, this section of society contribute more to the growth of most of

the businesses in the country. This reflection is seen in the enviable waiting during

weekends at almost every restaurant around the corner of the city be it small or a metro.

With this being noted, the biggest question right now is how many of us have actually

looked into our restaurant bill? We hardly know how much we are paying for actual bill.

Let’s analyze how much we are going to pay with GST. 37

GST IMPACT ON OUR REGULAR FOOD BILL. Even the regular items like tea/coffee will

have an effect. Consumer drinking tea/coffee for Rs 5 these days will now pay Rs 5.60 and

this though being a small amount is going to pinch their pockets 38

OVERVIEW OF IMPACT OF GST ON TOURISUM INDUSTRY Tourism represents world’s

third largest export avenue in 5 terms of global earnings after fuel and chemicals. Modern

tourism is closely linked to socio- economic development. Tourism is responsible for one

out of 11 jobs and 10% of the world’s economic output. Apart from providing employment,

income and foreign exchange for the country, the trade in the tourism sector has an
economically positive impact on other associated industries such as food manufacturing,

services, construction, agriculture, handicrafts etc. Hospitality is not only a high foreign

exchange grosser; it is also among the largest tax generators. There are multiple taxes

charged on the same Service/ Product offering by the Central as well as State

Governments. It is an understanding that the Taxes levied on Inbound Tourism is among st

the highest in the country, and this is one of the major reasons for India losing Foreign

Tourists to competing South East Asian Countries. On the historic midnight of 30th June

2016, India’s PM Narendra Modi ushered the country into the age of GST – 1 ‘One Nation

One Tax’. Being an impartial tax framework, the effects of GST can be seen across all

domains. 13 The Indian Tourism industry which was valued at US$ 136.2 in 2016 has also

faced the impact of GST. Endevour is placed in this article to highlight the GST impact on

travel and tourism industry in India 5 Tourism represents world’s third largest export

avenue in terms of global earnings after fuel and chemicals. Modern tourism is closely

linked to socio- economic development. Tourism is responsible for one out of 11 jobs and

10% of the world’s economic output. Apart from providing employment, income and foreign

exchange for the country, the trade in the tourism sector has an economically positive

impact on other associated industries such as food manufacturing, services, construction,

agriculture, handicrafts etc Hospitality is not only a high foreign exchange grosser, it is also

among the largest tax generators. There are multiple taxes charged on the same Service/

Product offering by the Central as well as State Governments. It is an understanding that

the Taxes levied on Inbound Tourism is among st the highest in the country, and this is one

of the major reasons for India losing Foreign Tourists to competing South East Asian

Countrie Tourism sector shall be impacted both positively and negatively under the GST

regime. The multiple taxes would be replaced by one single tax, the rate of which is likely

to be between 16%- 18%. The sector may benefit 1 in the form of lower tax rates which

should help in attracting more tourists in India. 39

GST EFFECT ON RESTAURANT The smaller outlets like food courts, dhabas, coffee bars
cater to large segments of population on daily basis. The maximum people who fall in this

business category earn modest income and thus the new tax format is likely to come under

criticism. All kinds of hotels whether it is AC or non-AC will definitely collect the higher rate

and this will bring an overall price hike in food items. According to the latest GST update

budget, hotels that are charging Rs 1000 per day for rooms are exempted from taxes.

Hotels that are charging Rs 5000 or more room tariff per day will have to pay 28 per cent

GST which is a big threat to country’s developing tourism and hospitality. Restaurants in

such hotels too, will have to pay 28 per cent GST. Under the current tax regime, restaurant

business owners do not get any option to adjust the output service tax liability with the

credit of input VAT on goods consumed, hence restaurant owners are in no mood to cheer

for the GST bill. Price hike in food can be expected in the upcoming days. If you are very

fond of eating outside, you might now need to check your pockets when you plan on it. 40

GST EFFECT ON TOUSIUM INDUSTRY 5 Hospitality is not only a high foreign

exchange grosser; it is also among the largest tax generators. There are multiple taxes

charged on the same Service/ Product offering by the Central as well as State

Governments. It is an understanding that the Taxes levied on Inbound Tourism is among st

the highest in the country, and this is one of the major reasons for India losing Foreign

Tourists to competing South East Asian Countries. On the historic midnight of 30th June

2016, India’s PM Narendra Modi ushered the country into the age of GST – 1 ‘One Nation

One Tax’. Being an impartial tax framework, the effects of GST can be seen across all

domains. The 8 Indian Tourism industry which was valued at US$ 136.2 in 2016 has also

faced the impact of GST. Endevour is placed in this article to highlight the GST impact on

travel and tourism industry in India. India’s 10 biggest tax reform yet has been met with an

equal measure of praise and criticism. While 7 the implementation of the Goods and

Service Tax promises to add a significant edge to the economy, by reducing costs for

customers, integrating taxes, and reducing business transaction costs, it will also increase

costs for businesses as well the burden of compliance. The hospitality and tourism industry
is one such sector in the economy that is deliberating over the new tax regime. Hospitality

is one of the most competitive and steadily growing industries in the country. 12 The

tourism industry contributes nearly $136 billion to India’s GDP and is expected to further

grow to US$ 280.5 billion by 2026. 11 Hospitality and tourism are also among the highest

employment generating sectors and among the top 10 sectors in the country with the

highest volume of foreign direct investment. 7 In addition to being one of the top sources

of foreign exchange, tourism is also among the highest tax generating sectors in the

country. 41

Hotel industry The concept of shelter in India is not new. 1 20th century is turning point

for hotel industry in India and many business owners entered into the field. Hotel industry is

a service oriented sector which offers many facilities/ services. On the bases of facilities

provided by hotels they are categorized into different tax slabs under GST. Hotel industry is

one of the growing industry in service sector.Due to the growth in tourism and travel with

rising domestic and foreign tourist, hotel sector is continuously growing. The Indian hotel

market worth estimated around US$ 17 billion. Hotel industry contributes greatly to tourism

and around 7.5% of national GDP. “GST shall be payable by taxable person on the supply

of goods and services. Taxable person is defined in section 9 of model GST law which

stipulates that a person who carries on any business at any place in Indian state and who

is registered or required to be registered under schedule III of the Act”. Services provided

by hotel industry,⮚ Serving of food and liquor⮚ Room accommodation services⮚ Rent a

cab⮚ Catering⮚ Laundry services⮚ Renting space for events, conference etc.⮚ Business

support service.⮚ Beauty parlour.⮚ Club and gymnasium services.⮚ Telecommunication

like Fax, WIFI, telephone. Before GST, hotel industry was under different kinds of taxes

like services tax, VAT, luxury tax and it was creating complexity in accounting. Tax rate

was not uniform as they were imposed by both state and central government. But after July

1st 2017 all hotels and restaurants came under single tax system. Now entire India is

subjected to impose single tax rate irrespective of where they situated. Section 2 deals with
introduction of hotel industry. A commercial establishment providing lodging meals and

other guest services in general, hospitality minimum of six letting bedrooms, at least three

of must have 42

attached private bathroom facilities. Although hotels are classified into „star‟ categories (1

star to 5 stars), there is no method of assigning these ratings and compliance with

customary requirements is voluntary. A US hotel with certain rating may look differ from

European or Asian with same rating and would provide a different level of amenities, rate

of facilities, and quality of service. Star hotel provides good and spacious accommodation

high-class decoration furnishings and color TV better-equipped bedrooms each with a

telephone and one or more bars or lounges with attached private bathrooms. Hotel industry

plays a vital role in the development of services sector. Hospitality plays a major role in this

sector. Tourism and Hotel paves the way for development of exchange currency in India.

Star hotels in various places connected with tourism places. People from various countries

traveling throughout the world want to stay and enjoy the whole day. The Luxury tax and

combined service tax is 6 % fixed by different states. After GST, highest rate is 28%, which

is less expensive; and this GST is for star hotels only. Industry sources said that the

average combined tax rate is in the range of 18% to22%.Under the new GST if we stay in

dinning at five star is more expensive. However budget hotels have been spared with room

rates of less than Rs.1000/- is nil, Between (Rs.1000 to Rs.2500) is 12%,(Rs2500 to

Rs5000) is 18% and aboveRs.5000 is 28%. 43

TOURISUM INDUSTRY On 8 the historic midnight of 30th June 2016, India’s PM

Narendra Modi ushered the country into the age of GST – ‘One Nation One Tax’. Being an

impartial tax framework, the effects of GST can be seen across all domains. The Indian

Tourism industry which was valued at US$ 136.2 in 2016 has also faced the impact of

GST. Endevour is placed in this article to highlight the GST impact on travel and tourism

industry in India. India’s 10 biggest tax reform yet has been met with an equal measure of
praise and criticism. While 7 the implementation of the Goods and Service Tax promises

to add a significant edge to the economy, by reducing costs for customers, integrating

taxes, and reducing business transaction costs, it will also increase costs for businesses as

well the burden of compliance. Tourism 3 Oriented Products (TOP) These are the

products and services created primarily for the tourists and also for the locals. These

products need a great share of investments in private sector. A few of them are − ●

Accommodations; For example, Taj, ITC Hotels. ● Transportation; For example, Owning

taxis, luxury buses, and boats. ● Retail Travel Agents ● Tour Operators ● Shopping

Centers such as malls ● Cinema Theatres such as PVR ● Restaurants for Food and

Beverages ● Tourism Information Centers ● Souvenirs Outlets ● Museums, Temples,

Gardens, and Theme parks Residents Oriented Products (ROP) Here, the products and

services are created mainly for the local residents staying at a particular tourist destination.

This category requires investment in public sectors more. Some of them are − 44

● Hospitals ● Public Parks ● Banks and ATMs ● Petrol Pumps ● Postal Service Intangible

Products of Tourism They include − ● Bookings of accommodations, theatres, and at

various sites. ● Tourists’ experience by visiting a destination, eating at a restaurant, or

performing an activity. ● Tourists’ memory which is created by storing the details of events

and experience on the tour. The high degree of satisfaction or dissatisfaction is often

stored as a long term memory. ● Transportation of tourists and their luggage from one

place to another. Tour Operator’s Products and Services To realize the facilities and

experience a tourism product offers, service is required by skilled and qualified staff. The

tour operator provides the following typical products and services − Accommodations The

tourist destinations are equipped with different types of accommodations. They cater for

tourists’ stay at the destination. ● Serviced − This type of accommodation is supported by

skilled staff such as housekeepers, drivers, guides, and cooks. ● Self-catering − This

accommodation offers staying facilities but dining is required to be self-catered. It is

equipped with cooking, fuel and facility, some basic supplies such as tea/coffee/sugar
sachets, and a drinking water source. ● Hotels − Budget rooms to 7* hotels with classy

amenities. The hotels contribute a major share of imparting the experience to the tourists

by providing best services and amenities. 45

● Guest Houses − Owned by business or government organizations, which can be used by

its staff and staff relatives. ● Camping Sites − They are open sites often located in areas of

lush greenery. They are equipped with clean place to pitch the personal tent, a water

supply, and electric supply. Camp sites have common rest rooms. Reservations The tour

operator is responsible for making reservations for special events or activities the tourists

are interested in. At some places, the reservations are required to be done well in advance

to avoid last minute hassles. The events or activities such as a music concert or a theatre

show, visiting a theme park or a zoo, require people to secure seats or avail entry with prior

reservations. Guided Tours The tour operators can arrange guided tours. Some qualified

staff who can get access to the place, explain the importance of the place, support, and

guide the participants through the entire visit. The guide is arranged to accompany the tour

participants as a part of tour. Transport Facilities These facilities are for travelling from one

place to another. Surface Transport − It includes support of transport by road or water. Air

Transport − This is the support of transport by air, generally given for long distance travel.

Many times the tours include a halt of a couple of hours at transit destinations. Today the

airports are built and maintained as engaging tourist terminals by providing amenities such

as spas, lounges, food joints, bars, and book shops, retail shops for selling authentic local

food, clothes, and souvenirs. Today the Airlines are no more backstage when it comes to

caring for their customers. They offer loyalty programs to their customers under Frequent

Flyer Program to encourage the customers to travel more and accumulate points and

redeem them against travel or rewards. 46

1 Tax rate under GST for hotels and restaurant.⮚ Room accommodation: room rent less

than 1000 is exempted from GST, rent from 1000 to 2500 is at12%, rent from 2500 to 7500
at 18% and room rent more than 7500 at 28%.⮚ Supply of food: For non-AC restaurant

12% is levied on food bill and for AC restaurant 18% is leviedon food bill.⮚ Supply of

alcohol: All restaurant who serve alcohol is chargeable at 18% on bill regardless they are

AC⮚ or non-AC restaurant. Rent a cab: if fuel cost is borne by service provider at 5% and

fuel cost is borne by recipient at 18% is charged.⮚ Business support services, laundry

service, beauty parlour, gymnasium service, club facility charged at18%⮚ Rent premises

for event and conference 18%⮚ Tele communication facility 18% 47

48

49

50

51

Introduction of Research Methodology: This chapter furnishes a precise of the research

methodology used in the research of the application of Goods and Service Tax (GST) to

the Impact of GST on Hotel and Tourisum industry. Redman & Mory (2001) defined

research as a systematic compaign to gain new cognition. In fact, research also is said as

an art of scientific investigation. The research methodology is the fashion to figure out the

research problem and to acquire the info systematically. It is based on the most effective

fashion to obtain useful info with a very minimum price to acquire the consequence of an

investigation. Besides that, it may understand as a scientific discipline of poring over how

research is done scientifically. The aim of this chapter is to discourse the method used in

the research. It is also a vital component in order to achieve the objective of the decision,

clear, accurate and reliable. In this chapter also, we can see the step is generally adapted

to know how to collect analysis and interpretation of data. It covers the aspects of research
contrive, research process, population and sampling, data aggregation technique,

development of instrument and data analysis adopted. The purpose of this chapter are to

describe the research methodology of this study, explain the sample selection, describe

the procedure used in designing the instrument and collecting the data, and provide an

explanation of the statistical procedure used to analyse the data. The questionnaire

research method has been chosen to determine the application and effect of Goods and

Service tax(GST) to Impact of GST on Hotel and Tourisum industry. 52

RESEARCH DESIGN Research design is defined as the logical and systematic approach

in planning and directing a piece of research . It is the overall plan of how the researcher

intends to implement their projects in practice . It is also stated as the arrangement of

conditions for collection and analysis of data in a manner that aims to combine relevance

to the research purpose in procedure. The purpose of research design is to insure that the

evidence obtain enables us to answer the initial objective clearly. There are several types

of research design and one of them is pre-experimental designs. The pre-experimental

design have three common designs that is one-short case study, one group protest to the

post test design and intact group comparison. This research is flowing one short case

study design. It depends one group is treatment and only one observation is done. The one

short case study means one group is exposed to the treatment, and only post test is given

to the observation ormeasure the effect of the treatment on the dependent variable within

the experimental group. Since it is applied on a single group, there is no control group

involved in this design. In this study, the independent variables are General Insurance

company such as insurer, customer and agents while dependent variables is goods and

service tax (GST) which is affected by independent variables, and to make sure there is

any correlation relationship between independent and dependent variables. 53

DATA COLLECTION METHOD Data is one of the vital aspects of any research studies.

Every research is based on the data which is analysed and interpreted to get information.
There are two sources of data. Primary data collection applies surveys, questionnaires,

experiments or direct observations, secondary data collection may be conducted by

collecting information from a diverse source of documents or electronically stored

information. In this research paper, two data collection will be used which is primary data

secondary data collection. PRIMARY DATA Primary data are the data which are

accumulated from the field under the control and superintendence of an investigator.

Primary data means original data that have been collected specially for the purpose in the

mind. This type of data is generally a fresh and collected for the first time. It is useful for

current studies as well as for further studies. The collection data tool that has been chosen

in this study is questionnaire. Most of the previous researcher use the questionnaire as

their data collection tool in the survey. The collections of answer will 54

gain through the questionnaire that had been answered by the insurer, customer and also

the owners of the hotels in lonavla. The questionnaire was administered to a random

company through google form and email to the company. The used to questionnaire in this

study does not meddle to the daily routine at the respondent’s since it took them only

several minutes to answer the questionnaire. A questionnaire has a list of enquiries

whether in an open ended or close ended for which respondents will give an answer

according to their cognition. For this survey the questionnaire using close ended question

format, in which case the respondent is asked to select an answer from among a list

provided and fill in the answer on the response scale provided. SECONDARY DATA

Secondary data are the data that have been already collected by and readily available from

other sources. Such data are cheaper and more quickly obtainable than the primary data

and also may be available when primary data can not be obtained at all. The researcher

will find the secondary data when it is not possible to collect the primary data. We can

acquire secondary data based on the research that can be gained after go through certain

sources such as indicated source that have been printed or not. Basically, secondary data

provide the research to understand more about the topic and give clear view and
prespective to your current study. Secondary data collected through various sources such

as internet i.e.google.com, newspapers and also GST books 55

SCOPE OF THE STUDY : GST shall cover all goods and services, except alcoholic liquor

for human consumption, for the levy of goods and services tax. In case of petroleum and

petroleum products, it has been provided that these goods shall not be subject to the levy

of Goods and Services Tax till a date notified on the recommendation of the Goods and

Services Tax Council. Promulgation of GST Council: Proposed Article 279A of the Bill

provides for constitution of Goods and Services Tax Council to examine issues relating to

goods and services tax and make recommendations to the Union and the States on

parameters like rates, exemption list and threshold limits. The Council shall function under

the Chairmanship of the Union Finance Minister and will have the State Union Minister as

its members. ● All goods and services are covered under GST Regime except Alcoholic

liquor for Human Consumption, ● Tobacco Products subject to levy of GST and Centre

may also levy excise duty ● GST Council yet to decide the incidence and levy of GST on

following; o a)Crude Petroleum o b)High Speed Diesel (HSD) o c)Motor Spirit (Petrol) o

d)Natural Gas o e)Aviation Turbine Fuel 56

● SAMPLING: ● My working area was a part of Panvel, Navi Mumbai. I have collected my

data From restaurant within Panvel. As we know that the person who engaged in

restaurant sector who will be salaried or Owners. I have targeted the team who engaged in

GST i.e. tax department and persons who had impact on GST. ● Sampling unit: ● My

sampling unit included the persons who engaged in restaurant sector. Such as owner of

restaurant. ● Size of sampling: ● Number of people surveyed. The sample consist branch

owner, employees and customers from 10 Restaurant. ● Sampling procedure: ● Data were

collected using the personal contact approach. I talked to 10 restaurants Owner. I met

several employees and Owner who immediately identified with the concern expressed

questionnaire is distributed the information about GST application in their firm. 57

Hence not able to collect much more information regarding hotel industry. The area of

study is limited to panvel. There are five star, three star, one star and two star, Heritage

resort, luxury resort, cottage resort, residency, etc. The study is limited to the luxury

heritage resort. OBJECTIVES OF THE STUDY:⮚ To reduce the complications in tax

administration and compliances.⮚ To create awareness among people who engaged in

Restaurant Sector.⮚ To cognize the concept of GST on Restaurant.⮚ To study features of

GST and Restaurant.⮚ To evaluate positive and negative impact of GST on Restaurant

sector.⮚ To furnish information for the further research work on GST. 58

HYPOTHESIS: The word hypothesis is derived from the greek hypo (under) and tithenas

(to place) and suggests that when the hypothesis is placed under the evidence as a

foundation they tend to support one another. It provides a proposed explanation which may

be confirmed or refuted by testing. A hypotheses is a suggested answer to the problem.

HO: The GST have positive impact on hotel and tourism industry. . H1: The GST have

Negative impact on hotel and tourism industry. 59

. 60

Literature Review The proposed GST is likely to change the whole scenario of current

indirect tax system. It is considered as biggest tax reform since 1947. Currently, in India

complicated indirect tax system is followed with imbrication of taxes imposed by unions

and states separately. GST will unify all the indirect taxes under as umbrella and will create

a smooth national market. Expert says that GST will help the economy to grow in more

efficient manner by improving the tax collection is it will disrupt all the tax barriers between

states and integrate country by single tax rate. GST was first introduced by France in 1954

and now it is followed by 140 countries . Most of the countries followed unified GST while
some countries like Brazil , Canada follow a dual GST system where tax imposed by

central and state both. In India also dual system of GST is proposed including CGST and

SGST. ● Vineet Chauhan (2017) Conduct a study on “ Measuring Awareness about

implementation of GST.” A study survey of small business unit of Rajasthan State in India.

The study seeks to evaluate the awareness of the business owners about GST difficulties

they face to encase of the current awareness about it. 148 small business owners were

analyses in order to identify the awareness about GST from Rajasthan state and the kind

and extent of relief provided and the implementation of the provision under GST Law. ●

Poonam (2017) The biggest problems in Indian tax system like Cascading effect & tax

evasion, distortion can be minimized by implementing GST. After amalgamation of local

state and central taxes competitiveness of industry, exporter and company will increase.

The extra revenue which can be generated from broaden tax base structure can be utilized

for the growth of nation. In economy tax polices play an important role because of their

impact on efficiency and equity. Indirect tax reforms have been as integral part of the

liberalization process since new economic reforms. Times of India (26 July 2017) page no

1&17 it is stated that Sweet makers are confused with fixing the tax for their products as

the ingredients used in the sweets are taxed separately as raw material and as finished

goods the products its taxing is different ex. Plain burfi is 5% taxed but chocolate burfi is

fixed with 28%. Plain burfi mixed with other dry fruits is of 12%. This taxing system makes

the Sweet makers to get confused on how much GST to be fixed for which product. 61

● Times of India(27 July 2017) Stated that the GST implication across different places for

the same product has wider differences which the consumers are unaware, resulting them

in surprise. Ex A Rasamalai sold in counter at a shop is taxed with 5% but if it is served in

the hotel it is taxed with 18% this has resulted in difference of consumers shopping to

purchase the similar products Dr. G Gabriel Prabhu: GST is here, and businesses are still

trying to understand the changes required in their current systems to accommodate the

new compliance model. On this note, we bring you our impact analysis on something which
is very near and dear to us; or, rather to our stomachs –the restaurant and food industry.

Here we will try to explain how the restaurant bill will look under GST and what are its

implications for the end consumers the owners and the overall industry. Dr.Manjunath and

et. Al (2016) : “Customer satisfaction in Fast food industry” . The objective of the study is to

find out the key success factors for fast food industry in region of mysore district and its

aim is to find out the essential factors or determinants of customer satisfaction in the

restaurant industry of mysore district. The findings revealed that the service quality and

physical design are the key factors for satisfaction in fast food industry in my sore district.

Jonathan and et. Al (2017) : “ Impact of GST in hotel and restaurants”. The objective of the

study is to how the restaurant bill will look under GST , and what are the implications for

the end consumers for the owner and the overall industry. The findings revealed that hotels

are liable for GST of 28% (14% CGST+14% SGST) as against the effective tax of 21%

under present indirect tax regime. Dash .A Volume 3 Issue 5 May 2017, “ positive and

negative impact of GST on Indian economy”. The objective of the study is to cognize the

concept of GST , to study the features of GST , to furnish information for further research

work on GST, to evaluate the advantages and challenges of GST . Credits of input taxes

paid at each stage will be available in the subsequent stage of value addition which makes

GST essentially a tax only on value addition at each stage. Alka Shah (2nd Nov 2017)

“Integrated Goods and services tax an Indian innovation” .The objective of the study is to

cross utilisation of credit is to be done and adjustments to be made between centre and

states. The 62

paper mainly focuses on the key provisions for determining place of supply of

Goods/services and nature of supply i.e interstate or intra -state. 63

Organization: 10 Hotels in lonavala 1. Is this your first Business related to Restaurant

sector? (a) Yes (b) No Interpretation: 80% of the Owner had the first business related to

hotel sector and rest other 20% had other industry. 64

2. Do you enjoy what you do at your work? (a) Yes (b) No (c) May be Interpretation: 70% of

owners are enjoy their work which can they do, rest 25% said may be they enjoy their work

that means they said if conditions are satisfied according to them then they enjoy their

work otherwise not and remaining 5% are not enjoy their work because of unsatisfied

targets. 66

3. Are you satisfied with GST applying in your hotel ? (a) Yes (b) No (c) May be

Interpretation: 75% of the owner’s satisfied with GST applying in their organization, rest

15% are not satisfied with GST and remaining 10% said that may be they were satisfied.

67

4. How would you rate your overall experience about GST application in your Restaurant?

(a) Highly satisfactory (b) Satisfactory (c) Neutral (d) Unsatisfactory Interpretation: 20% of

the owners are highly satisfied with GST, 60% of the owners are satisfied with GST, rest

15% are neutrally satisfied with GST and remaining 5% are not satisfied with GST. 68

5. Have your hotel received benefits after GST application? (a) Yes (b) No (c) May be

Interpretation: 50% of owners said that their restaurant received benefit after applying

GST, rest 30% of restaurant said that their restaurant are not received any benefits and

remaining 20% said their restaurant may be received benefits after applying GST. 69

6. Is you have stress because of applying GST? (a) Yes (b) No (c) May be (d) Can’t say

Interpretation: 44% of owners had stress because of applying GST, 16% of owners not

have stress because of GST, rest 32% of owners may be have stress and remaining 8%

can’t say anything about that. 70

market? (a) Yes (b) No (c) May be (d) Can’t say Interpretation: 90% of the owners said that

GST is positively influence on their restaurant’s performance in the market, rest 5% said

GST is not positively influence on their restaurant’s performance and remaining 5% said

may be GST positively influence on their restaurant’s performance. 71

8. Is your working environment is safe because of applying GST? (a) Yes (b) No (c) May

be (d) Can’t say Interpretation: There are 85% of the owners said that their working

conditions are safe because of applying GST, rest 5% of owners said may be their

conditions are safe and remaining 10% of owners can’t say anything about that. 72

12. How would GST impact the restaurant selling alcoholic beverages? (a) GOOD (b) BAD

(c) CAN’T SAY Interpretation: There are 59% of the owners said that GST impact good for

selling alcohol beverage and 24% said its Bad impact of selling alcohol beverage 17 % of

owners can’t say anything about that. 73

74

CONCLUSION After the all above the information it’s proved that null hypothesis (H1) is

going to be rejected & (HO) the main hypothesis is to be proved that is it totally right after

conducting a research on the study of impact of GST on hotel industry SUGGESTIONS 1.)

Customer-slab rate policy have to take initiative by the government of India to cut the

income level differences among the low middle-class and low income group. 2.) As the

hotels comprising of Non A/c compartments, the hotel have to fix a moderate rate of GST

as it suits the income needs of low-middle class and low income people 3.) The

Allowances on GST rates in small-sized and moderate hotels as it encourages the low-

income and middle class people. 4.) In point of GST in hotel, especially for the alcoholic
products like liquor should be taxed at the highest slab rate compared to the current 18%

GST rate on A/c restaurants. 5.) Reduce the cost of the food and beverage it encourages

the low –income and middle class people. 75

References: 1) GST E- Book From www.GST.com. 2) www.gst.com 3) www.google.com 4)

www.GST in india.com 5)Hotel and tourisum industry website. 76

QUESTIONNAIRE Personal details: NAME OF THE HOTEL: Name:-

Contact No: Add:1. Is this your first

Business related to Restaurant sector? (a) Yes (b) No 2. Do you enjoy

what you do at your work? (a) Yes ( b) No (c) May be 3. Are you

satisfied with GST applying in your hotel? (a) Yes (b) No (c) May be 4.

How would you rate your overall experience about GST application in your Restaurant? (a)

Highly satisfactory (b) Satisfactory (c)

Neutral (d) Unsatisfactory 5. Have your hotel received

benefits after GST application? (a) Yes (b) No (c) May be 6. Is you

have stress because of applying GST? (a) Yes (b) No (c) May be

7. Is your organization can provide awareness to your customers about GST application on

hotel industry? (a) Yes (b) No (d) Can’t say 8. How is the

relationship between you and your co-workers? 77

(a) Good (b) Bad (c) Can’t say 9. Has your customers replied

positively about GST application? (a) Yes (b) No (c) May

be (d) can’t say 10. Is application of GST positively influence on your restaurant’s

performance in the market? (a) Yes (b) No (c) May be

(d) Can’t say 11. Is your working environment is safe because of applying GST? (a)

Yes (b) No (c) May be (d) Can’t say 12. How would

GST impact the restaurant selling alcoholic beverages? (a) Good (b)
Bad (c) Can’t say . 78

79
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