1

2
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ABSTRACT

INDEX

Sr. No. Chapter Title of the Chapter Page No.

1 Chapter - 01 Introduction 10
2 Chapter - 02 Research Methodology 42
3 Chapter -03 Literature Review 53
4 Chapter - 04 Data Analysis and 57
Interpretation
5 Chapter - 05 Conclusion & Suggestions 70
6 Chapter – 06 Reference
7 Chapter - 07 Bibliography
8 Chapter - 08 QUESTIONNAIRE
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CONTENT:

Chapter- 01: Introduction:

Chapte Introduction Pages

r No.
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
Chapte Research methodology
r No.
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
Chapte Literature Review 53
r no.
Chapte Data Analysis and Interpretation 57
r no.
Chapte Conclusion 70
r no.
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CHAPTER No-01
INTRODUCTION
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1.1Introduction 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 1 st 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.
 8

1.2 INTRODUCED GST

France 1st country to implement GST in 1954, China adopted in 1994.

New Delhi, On July 1, the Goods and Services Tax regime will kick-start across the country. The
announcement was made by Union Finance Minister Arun Jaitley at the two-day-long meeting of
the GST Council that ended in Srinagar, Jammu and Kashmir on Friday. Jaitley said, "Most
services exempted from the tax will continue to be exempted under the GST."

With the GST, India will join select league of nations with a goods and service tax. In fact, France
was the first country to implement the GST in 1954. Since then, Germany, Italy, the UK, South
Korea, Japan, Canada and Australia have been among the over a dozen nations which have
implemented the GST China implemented GST in 1994 while Russia did it in 1991. Saudi Arabia
plans to do it in 2018. The GST Council finalized tax rates on 80-90 percent of goods and services
under the four-slab structure with essential items of daily use being kept in the lowest bracket of 5
percent. The GST will be a national sales tax that will be levied on consumption of goods or use of
services. It will replace 16 current levies -- seven central taxes like excise duty and service tax and
nine state taxes like Value Added Tax and entertainment tax -- thereby creating India as one market
with one tax rate. Last week, the Reserve Bank called the GST a "game changer" and said given the
cross-country experience and empirical evidence on efficiency gains from the VAT in the Indian
context, the implementation of this comprehensive indirect tax is likely to ensure higher tax
buoyancy and an improvement in government finances over the medium term. The GST is a
destination-based single tax on the supply of goods and services from the manufacturer to the
consumer and is one indirect tax for the entire country
 9

1.3 Status of GST in India

 10

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 28 th 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.

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

 11

(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.
 12

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.

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.
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1.4 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.
 14

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

 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.
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 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.
 17

 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
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1.5 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)
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1.6 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.
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 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

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The 32nd GST Council meeting was held on 10th January 2019 at Delhi. It was chaired by the
Finance minister Shri Arun Jaitley.

GST Registration:
Basic exemption limit for suppliers of goods will be increased from Rs 20 lakhs to Rs 40 lakhs.
However, this limit remains Rs 20 lakhs for suppliers of services. For the special category States,
the limit for registration is currently at Rs 10 lakhs. This limit in case of supply of goods is
increased up to Rs 20 lakhs and such States have been given an option to either choose Rs 40 lakhs
or Rs 20 lakhs threshold limit in a week’s time.
 
New Composition scheme for Services providers:
Those suppliers rendering either independent services or providing a mixed supply of goods &
services with a turnover of up to Rs 50 lakhs p.a in the preceding financial year, can join this
scheme. The Tax rate is fixed at 6% (3% CGST +3% SGST).
 
Changes to existing Composition scheme:
 Increase in the limit to opt into the scheme will be increased up to Rs 1.5 crore effective
from 1st April 2019.
 Tax to be paid Quarterly and GST Returns to be filed annually.

Consensus received for charging calamity cess in Kerala:

Kerala has been given an approval to charge Disaster/calamity cess of up to 1% on all the intra-
state supplies of goods and services within Kerala, for up to two years
 
GST Rate cuts:
 No changes in GST Rates until Revenue spikes, recommended by the GST council
 No GST rate cut on sale of under construction flats. Instead, a 7 member group of ministers
is formed to study the implications of reducing the rates from 12% to 5% on supply of such
under construction properties.
 Further, No GST rate cuts on the Private lottery distributions. A Group of ministers will be
formed with representatives from developing and selling states

Expectations from the 32nd GST Council Meeting :

 To decide whether or not to include the supply of residential properties and supply of
services by small service providers, under Composition scheme. A group of ministers(GoM)
is looking into the same. As far as the taxability of the residential properties is concerned,
there are two proposals tabled before the council. One, where a tax rate of 5% will be levied
on the supply of residential properties (under construction) without Input tax credit (by the
option of composition scheme). The other, where the tax rate levied will be 8% to keep it at
par with the tax rate on affordable housing.
 To deliberate whether or not the tax rates on Lotteries must be 12% or 28% GST Slab for
private schemes respectively.
 23

 To take a call on the threshold limit of exemption for MSMEs.

 A committee by Shri Sushil Kumar Modi was set up in the 30th GST Council Meeting. The
committee studied the implication of setting up a fund in case of exigencies such as natural
disasters, the recent one being the floods in Kerala. They have proposed to introduce
‘Revenue Mobility scheme’ to address the issues. The 32nd GST Council Meeting will be
an important one, as it will take a final call on funding natural calamities that have been a
serious point of consideration by many Council members for quite some time.

GST Council meeting happened on 24th February 2019 (Sunday).

The 33rd GST Council meeting came to an end after heavy theatrics. The Council was initially
supposed to meet on the 20th Feb 2019 via video conferencing but was later deferred to 24th Feb
2019 to meet at Delhi, post the refusal by some state FMs. With the general elections around the
corner, it was highly speculated that the meeting would be politically driven.
The sops announced by the GST Council will boost the real estate selling henceforth and monitor
one of the most unregulated sectors in India, by ensuring that the rate cut benefits are passed on to
the neo and middle-class home buyers.
The agenda of the 33rd GST Council meeting covered ‘Under-Construction Housing’ sector and
‘Private Lottery Distribution’.

Meeting concludes:
The announcements on rate cuts for under-construction houses will be notified on 10th March 2019
after the GST Council passes the draft notifications and will be made applicable from 1st April
2019.
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Meeting adjourned from 20th Feb to 24th Feb 2019:

The 33rd GST Council meeting was to be held on 20th February 2019 via Video Conferencing.
However, it was adjourned to 24th February 2019(Sunday), with no conclusive decision taken.
The GST Council met on 20th February 2019 for a brief time to start with the discussions on real
estate. However, considering that a meet via video conferencing cannot support the detailed
discussion on issue crucial such as real estate taxation, the meeting was adjourned. No discussions
were initiated on Lottery.
The GST Council also extended the GSTR-3B Due date for the month of January 2019 by two days
to 22nd February 2019.
It is chaired by the Finance Minister ArunJaitley. This will be the 33rd GST Council meeting and
the first one after the Interim Budget 2019.

GST Council Meeting Expectations:

Reduce GST on under-construction homes:

Proposal placed before the council to reduce the rates for under-construction homes. It has been
proposed to reduce to 5% from 12% and to 3% from 8% in the case of affordable housing. In both
cases, the Input Tax Credit (ITC) will not be available.
One of the primary issues that builders currently face is that the balance ITC  remains unutilised
due to the high tax rate on cement and other raw materials. ITC is more when compared to tax
liability. Hence, there attracts a need for applying GST refund -a process which is yet to stabilise.
GST Rate slashes on Cement from 28% to 18%:
One of the much-asked demands of the industry is to cut the GST Rate charged the sale of Cement.
Cement is the basic raw material in the construction sector and a necessity for building homes. It is
supposedly positioned at the 5th- to be an essential material accounting for the construction costs in
India. Therefore, the issue on taxability of Cement garnered GST Council’s attention after multiple
requests of the Cement Manufacturers Association India.
Duty drawback like scheme under GST:
Compensation for taxes other than the basic customs duty (BCD) is not given to the exporters under
the GST regime. Accordingly, it affects their competitiveness. GST Officials involved in the
exercise confirmed that the duty drawback scheme is being prepared after a requisition letter from
the Directorate General of Foreign Trade (DGFT) to the Central Board of Indirect Taxes &
Customs seeking such relief.
 25

1.7 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.
 26

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

1.8 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.
 27

1.9 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

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
 28

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
 29

EXECUTIVES

DR. Ajay Bhushan Pandey – Chairman

Prakash Kumar – CEO

DR. Abhishek Gupta – EVP (support)

Kajal singh – EVP (service)

Nitin Mishra – EVP (technology)

Nirmal Kumar – Software Development

Col. Pankaj Dikshit – SVP (IT Infrastructure)

Pramod B. Somnath – SVP (Procurement & control)

Anand Pande – SVP (CISO)

Pankaj Sharma – VP (Compony secretory &Chief compliance officer)

Probin Dokania – Chief Financial Office

 30

1.10 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.
 31

1.11 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.

GST BIFURCATION AS PER RESTAURANT

Dhabas & Small Restaurants – 5%

Non- Ac Restaurants – 12%
AC Restaurants – 18%
Five Star Restaurants – 28%
Considering the standard rate of 18% of GST, every restaurant bill payer can save
around Rs. 55 on the bill of Rs. 2,200. If we see the effective rate of tax under current
system, it ends up to around 20.5%, which will come down to 18% with the GST
effect.
 32

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.
 33

1.12 Hotel industry

The concept of shelter in India is not new. 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.
 34

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 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%.
 35

1.13 Impact of GST On hotel sector.

 Multiple taxes is replaced by single tax, therefore lower tax rate helps in attracting more
tourists in India.

 Centralised registration is compulsory in each state where they providing hotel facility on
own account or through agency.

 Provision for GST audit if the total turnover is more than prescribed limit.

 Hotel and restaurant has to make appropriate policy on discount offers and policies in
advance, it shall be a part of documentation.

 Every receipts/ invoice inward and outward supplies have to be uploaded in the system.

 Alcohol and electricity are out of the preview of GST. Hotel industry would not be able to
avail the input credit on the two items which will have a negative impact on this sector.

 All restaurant are not eligible to charge GST on food bills only those who not registered
can”t charge GST.
 36

five star hotels final gst rates are 28%or18%

Star rating of hotels irrelevant for determining the applicable rate of GST.

1 . GST rate is 28% if hotel room tariff is more than Rs.7500 per unit per day

2 . GST rate is 18% if hotel room tariff is less than Rs.7500 per unit per day

Clarification on GST rates on hotel accommodation

Reports have been received expressing doubts whether 5-star hotels are liable to pay GST @ 28%
irrespective of the declared tariff of a unit of accommodation.

In this context, it is hereby clarified that accommodation in any hotel, including 5-star hotels having
declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will attract GST
@ 18%. Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST.
 37

1.14 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%

 38

1.15 Booking a hotel after GST rollout?

Here's how much you will pay 

Last weekend, the GST council revised tax rates for hotels based on room tariffs. The changes
made are marginally positive for the mid-tier hotels whereas the luxury segment may not have
much impact.

Hotel tariffs between Rs 2,500 and Rs 7,500 would attract a flat GST rate of 18% from earlier
proposed 28%.

At present, hotels that charge tariffs in this range pay 21-22% tax. Hotel tariffs above Rs 7,500
would attract GST rate of 28%. The GST council has also reduced tax on restaurants in . five-star
hotels to 18% from 28%.

This is at par with standalone air-conditioned restaurants. For room rates less than Rs 1,000, there
will be no tax while those between Rs 1000 and Rs 2,500 will attract GST of 12%. Analysts point
out that there would no material impact on margins or cost savings of hotels across categories.

Some point out that mid-sized hotels may pass on the difference of close to 3% in their current and
GST tax rate to travellers by slashing room tariffs. 
39
 40

CHAPTER NO-02

RESEARCH

METHODOLOGY
 41

2.1 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.

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.
 42

2.2 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.
 43

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
 44

gain through the questionnaire that had been answered by the insurer, customer and also the owners
of the hotels in panvel.

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 perspective to your current study.

Secondary data collected through various sources such as internet i.e.google.com, newspapers and
also GST books which refers by chartered accountants CA.
 45

2.3 GST on Hotel Industry:

The head office located at Mohali is the leading assurance & consulting organization well
positioned to assist GST in India. It is a team of 400 people, 75 Professionals with industry
background and experience. GST introduced in 1991 by replacing federal sales tax. Levy of GST
ranging from 13% to 15% and other at 5%. Tax to GDP ratio first increased and then decreased
when rates we raised and then steady up down. GST introduced in 1985 is the peak rate of 15%. In
Constitutional bill in 2014 rate of taxes concessional 12% standard rate 17-18%, Luxury rate
40%.GST on global outlook 31% to 36%.
The current position of hotels and tourism hits various taxes across the channel by VAT to output
service tax and luxury tax. The vat varies from state to state and lies between 12 to 14.5%.Similarly
luxury taxes depends on the proportion of room tariff and usually scales between 0 to 12 %. Service
tax fluctuates depends upon the service usually 8.7 of the total room tariff food rate differ from
place to place. For food and beverage, 40 % of the bill attracts the service and it comes to 5.8
percent when considered on total bill. For booking in hotels for occasions like marriages,
ceremonies and meetings an rebate of 30% is given and the effective service tax works out to
10.5% on the total charges.
The structure of 5%, 12%, 18% and 28% of which the service sector will be taxed at 18 %. The 5
% slab on food proposed which is a positive of subsumed taxed for hotels and restaurants.
However, the 18 % levy on services or room revenue compared to neighboring countries, which
charge a tourism tax between 4 to 7 % rules out fair competition. The federation of Association in
Indian tourism and hospitality has pointed out amendments to the draft good and services tax law
that supports exception for tourism and hospitality business. It has highlighted that most nations
 46

recognize tourism as a critical economic driver and follow a Tourism Rate which is lower than 50%
of the Standard Rate on other sectors.

How will GST work?

The new tax structure of GST will come into effect from April, 2017. Once this happens, all the
state and central taxes that are levied on goods and services such as excise duty, VAT, service tax,
luxury tax, entertainment tax, etc. will be incorporated within a single tax comprising two
components, i.e. state GST and central GST. Each of these taxes will be divided uniformly to form
the GST rate. The anticipated rate of GST is likely to be 18 %. In the present non GST rule, indirect
taxes on goods vary between 27 to 32% whereas those on services stand at 15 %.

How will it affect goods and services?

Post GST implementation, the cost of goods is likely to decrease and the cost of services is likely to
increase. However, the overall pressure of taxes on consumers will reduce significantly. Purchase
of small cars, two wheelers, movie tickets, groceries, and consumer electronics are likely to become
cheaper for the buyers whereas mobile phones, air tickets, and insurance premiums will witness
price appreciation. Few exceptions to the GST bill include alcohol, electricity, tobacco, and
petroleum products

Impact on Hotels:

Section 4 deals with GST influence hotels and restaurant. Those restaurants whose annual turnover
less than Rs.50 lakh, GST is 5 %. Dinner in Non-A/c small restaurants is 12 % Dinner in A/C
restaurants is 18 %( eating with liquor license). Dinner in 3 star or 5 star is 28 %. All the above said
hotels, inns, guesthouses, Clubs, Campsites or other commercial places, grant homes, vilas input
tax credit available. At present the hotels are impacted by multiple taxes. There are three taxes
levied on hotel, which are VAT, Luxury tax by state and service tax by centre. These taxes goes up
to 28 % after implementation, multiple taxes would replaced by one single tax 17 to 19 %.
 47

Negative impact:

The levy of service tax on room tariffs restaurants, the impact of which will be passed on to the end
customer is likely to have a detrimental impact on demand as it drives up the effective consumer
cost. However, roll out of GST could neutralize this impact. The incremental tax on air travel will
also push up the travel bill the quantum of the same would be low

2.4 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

SAMPLING:
 48

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.

Tools and techniques:

 49

Under this project, in the questionnaire – likert’s scale was employed to determine scores. A likert
scale is psychometric scale commonly involved in research that employees questionnaires. It is the
most widely used approach of scaling response in survey research, such that the term is often used
to interchange with rating scale or more accurately the likert’s scale, even though the two are not
synonyms. The scale is named after its inventor, psychologist Rensislikert.

The statements/items for the questionnaire were formed after consulting relevant literature. The
survey questionnaire also included a section to capture the general profile of respondents. They
were asked about their environmental conditions, provide help from head quarters and customers
response, etc.

2.5 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.
 50

2.6 Limitation of the study:

Due to time constraints, the study period is limited to only 2 Month. 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.

2.7 Meaning of 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.

Definitions of hypothesis:

According to Rummel and Balline A hypothesis is a statement capable of being tested and there by
verified or rejected.

HYPOTHESIS:

HO: The GST have positive impact on hotel industry.

.
H1: The GST have Negative impact on hotel industry.
 51

Chapter No-03

Literature Review
 52

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.
 53

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.

● 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.
 54

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 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.
 55

Chapter No-04
Data Analysis, Interpretation
and presentation
 56

Organization: 10 Hotels in Panvel

1. Is this your first Business related to Restaurant sector?
(a) Yes
(b) No

20%

Yes
No

80%

Interpretation:
80% of the Owner had the first business related to hotel sector and rest other 20% had other
industry.
 57

2. Do you enjoy what you do at your work?

(a) Yes
(b) No
(c) May be

25%

Yes
No
May be

5%

70%

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.
 58

3. Are you satisfied with GST applying in your hotel ?

(a) Yes
(b) No
(c) May be

10%

15%
Yes
No
May be

75%

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.
 59

4. How would you rate your overall experience about GST application in your Restaurant?
(a) Highly satisfactory
(b) Satisfactory
(c) Neutral
(d) Unsatisfactory

5%

20%
15%

Highly Satisfactory
Satisfactory
Neutral
Unsatisfactory

60%

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.
 60

5. Have your hotel received benefits after GST application?

(a) Yes
(b) No
(c) May be

20%

Yes
No
May be
50%

30%

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.
 61

6. Is you have stress because of applying GST?

(a) Yes
(b) No
(c) May be
(d) Can’t say

8%

44% Yes
32% No
May be
Can't say

16%

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.
 62

7. Is your organization can provide awareness to your customers about GST application on
hotel industry?
(a) Yes
(b)No

Yes
No

100%

Interpretation:
Hotel Industry owners cannot provide awareness to their customers about GST application on their
hotel. Because it’s not the part of their business.
 63

8. How is the relationship between you and your co-workers?

(a) Good
(b) Bad
(c) Can’t say

8%

GOOD
BAD
CAN'T SAY

92%

Interpretation:
92% of owners have good relationship with his co-workers, rest 8% can’t say anything about that.
 64

9. Has your customers replied positively about GST application?

(a) Yes
(b) No
(c) May be
(d) can’t say

5%

20%

Yes
No
May be
Can't say

75%

Interpretation:
20% of the owners said their customers positively replied on GST application, 75% of owners said
their customers are not positively replied on GST and rest 5% said that may be their customers
replied positively on GST application in their firm.
 65

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

5%
5%

Yes
No
May be
Can't say

90%

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.
 66

11. Is your working environment is safe because of applying GST?

(a) Yes
(b) No
(c) May be
(d) Can’t say

10%

5%

Yes
No
May be
Can't say

85%

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.

12. How would GST impact the restaurant selling alcoholic beverages?
 67

(a) GOOD

(b) BAD

(c) CAN’T SAY

17%

GOOD
BAD
CAN'T SAY
24%
60%

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.
 68

Chapter- 5

Conclusions & Suggestions

 69

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

Companies which focuses on food and beverages could be the biggest beneficiaries of GST within
the hotel sector. This will help the consumers and also leads to savings. After implementation of
GST .it was found that the budget hotels are the most benefitted. The hotels falling are GST under
18-28% GST slab bears the adverse effects of GST.

The solution for this is to reduce the “ARR-Average Room Rates”. The travellers look for budget
hotels as they provide cheaper accommodation. GST includes a uniform tax structure and through
this all the states have their own taxes. Before the restaurant industry was burdened with multiple
taxation. Now this duality of tax is removed. It also helps in improving the financial management.
Hopefully, GST will remove the problems faced by the hotel sector leading to cost optimization and
free flow of transactions.
 70

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.
 71

References:

 www.slideshare.net.asandco,gst Jan 11, 2013. By Hirak Parmar.

 3) www.gst.com
 4) www.google.com
 5) www.GST in india.com
 72

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
 73

8. How is the relationship between you and your co-workers?

(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