“A STUDY ON IMPACT OF GOODS AND SERVICE TAX ON

HOTEL AND RESTUARANTS IN MAHARASHTRA”

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI

FOR PRACTICAL COMPLETION OF THE DEGREE OF

BACHELORS IN COMMERCE (ACCOUNTING AND

FINANCE) UNDER THE FACULTY OF COMMERCE

BY MISS GAYATRI SUBHASH TATKARE

ROLL NO: 138

PRN NUMBER: 2022300023

CLASS: TYBAF

UNDER THE GUIDANCE OF

DR. SHEFALI KONDEWAR

VPM

K. G. JOSHI COLLEGE OF ARTS

N. G. BEDEKAR COLLEGE OF COMMERCE

CHENDANI BUNDER ROAD

MARCH-2024

I
COLLEGE CERTIFICATE

II
 DECLARATION BY LEARNER
I the undersigned Miss. GAYATRI SUBHASH TATKARE here by, declare
that the work embodied in this project work titled “(A Study on impact of goods
and service tax on hotel and restaurants in Maharashtra)’’, forms my own
contribution to the research work carried out under the guidance of DR.
SHEFALI KONDEWAR 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
been previously submitted to any other university.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the webliography.
I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

GAYATRI S. TATKARE

Certified by,
DR. SHEFALI KONDEWAR

III
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous 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. Suchitra Naik for providing the
necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator, DR. Neelam Shaikh for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide DR.
SHEFALI KONDEWAR, 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.

IV
 INDEX

SR.NO TOPIC PAGE

NO

I CERTIFICATE II
II DECLARATION BY LEARNER III
III ACKNOWLGEMENT IV
IV LIST OF TABLES AND GRAPHS VI
1. INTRODUCTION 1-24
2. RESEARCH METHODOLOGY 25-35
3. REVIEW OF LITERATURES 36-62
4. DATA ANALYSIS, INTERPRETATION, AND 63-82
PRESENTATION
5. CONCLUSION 83-91
6. REFERANCE VIII
6. APPENDIX X

V
 LIST OF GRAPH NO
GRAPH PARTICULAR PAGE NO
NO
1 Restaurant sector 63
2 Enjoyment 64
3 Satisfaction with GST application 65
4 Rating 66
5 Benefits 67
6 Stress 68
7 Customer awareness about GST 69
application
8 Work place relationship 70
9 Customer feedback 71
10 Impact of GST on restaurant 72
performance
11 Safety because of applying GST 73

12 Impact on Alcohol sector 74

13 Difference 75
14 Perception 76
15 Implementation of GST the pricing of 77
food and beverages
16 Monthly Income 78
17 Profile 79
18 Exemption 80
19 Applicable 81
20 Tax consumption on goods and service 82

VI
 LIST OF TABLE NO
TABLE NO PARTICULARS PAGE NO
1. Restaurant sector 63
2. Enjoyment 64
3. 65
Satisfaction with GST application
4. Rating 66
5. Benefits 67
6. Stress 68
7. Customer awareness about GST 69
application
8. Work place relationship 70
9. Customer feedback 71
10. Impact of GST on restaurant 72
performance
11. Safety because of applying 73
GST
12. Impact on Alcohol sector 74
13. Difference 75
14. Perception 76
15. Implementation of GST the pricing of 77
food and beverages
16. Monthly Income 78
17. Profile 79
18. Exemption 80
19. Applicable 81
20. Tax consumption on goods and service 82

VII
CHAPTER NO 1. INTRODUCTION

What is GST?

Goods and Services Tax (GST) is a comprehensive tax levied on the delivery of goods and
services throughout India. GST is a single indirect tax for the entire country, making India
a united common market. GST is a single tax levied on the supply of goods and services
from the manufacturer to the consumer. Credits for input taxes paid at each stage will be
accessible at the next stage of value addition, making GST basically a tax on value addition
at each stage. The end client will thus pay only the GST levied by the last dealer in the
supply chain, with set-off benefits applied at all previous levels.

The GST rate for restaurants that serve food and beverages is 5% for non-air-conditioned
restaurants and 18% for air-conditioned restaurants. Additionally, the GST rate is 18% for
restaurants that provide alcoholic beverages. Furthermore, outside catering services are
subject to a 5% GST rate.

What is the GST on hotels and restaurants?

If you are a customer or a business owner in the food industry, you should understand what
GST is on restaurants. The government collects GST on restaurants based on their
establishment type. Currently, the GST on restaurants is 5%, 12%, and 18%, which
establishments must pay to the government when submitting taxes.

1
The implementation of GST on restaurants has superseded the Service Tax and Value
Added Tax regimes for food services. The basic restaurant GST rates are listed above, and
the restaurants collect them from their clients and deposit them with the government.
However, small restaurants with an annual revenue of up to Rs. 1.5 crores can use the GST
composition plan to pay a lower fixed tax rate than the ordinary GST rate. Restaurants can
also claim an Input Tax Credit (ITC) for GST paid on inputs such as raw materials, rent,
and utilities, subject to specific circumstances.

GST IS NECESSARY

The introduction of a GST is intended to replace the existing numerous tax structures of
central and state taxes. It is not only necessary, but also essential in today's rapidly changing
economic climate. Separate taxation of goods and services frequently necessitates the
division of transaction values into the value of products and services for taxation, leading
to increased complexities, administration, and compliance expenses. Integrating various
taxes into a GST system would allow full credit for input taxes collected.

GST, as a destination-based consumption tax based on the VAT principle, would also serve
to remove economic distortions and promote the establishment of a shared national market.

Benefits of GST

A) For business and industry.

Easy compliance: A powerful and comprehensive IT infrastructure will serve as the

cornerstone for India's GST system. As a result, all tax payer services, such as registrations,
returns, payments, etc., will be available to taxpayers online, making compliance easier and
more transparent.

GST will ensure that indirect tax rates and structures are consistent across the country,
boosting the certainty and ease of doing business. In other words, GST would make doing
business in the country tax-neutral, regardless of where you do business.

Removal of cascading: A system of seamless tax credits across the value chain and across
state borders would ensure that there is minimal tax cascading. This would lower the hidden
costs of conducting business. Reduced transaction costs of doing business would eventually
lead to increased competitiveness for commerce and industry.

2
Manufacturers and exporters benefit: The inclusion of key Central and State taxes in GST,
complete and comprehensive set-off of input goods and services, and the elimination of
Central Sales Tax (CST) would lower the cost of locally produced goods and services. This
will strengthen the competitiveness of Indian goods and services in the worldwide market,
boosting Indian exports. Uniform tax rates and procedures across the country will also help
to reduce compliance costs.

B) For the Central and State governments.

GST replaces multiple indirect taxes at the central and state levels, making it simple and
straightforward to administer. GST, when supported by a solid end-to-end IT infrastructure,
would be simpler and easier to administer than all other indirect taxes levied by the central
and state governments to date.

Better leakage controls: GST will result in improved tax compliance due to a robust IT
infrastructure. Because of the smooth transfer of input tax credit from one level to the next
in the value chain, GST has an inbuilt mechanism to promote tax compliance by traders.

Higher revenue efficiency: GST is projected to reduce the cost of the government's tax
collection, resulting in increased revenue efficiency.

C) For the consumers single and transparent

tax based on the value of goods and services the cost of most goods and services in the
country today is heavily taxed due to many indirect taxes levied by the central and state
governments, as well as partial or no input tax credits provided at progressive stages of
value addition. Under GST, there would be simply one tax from the manufacturer to the
customer, resulting in greater clarity regarding taxes paid to the final consumer.

Relief in overall tax burden: As a result of efficiency gains and leakage prevention, the total
tax burden on most commodities will decrease, benefiting consumers.

GST-SALIENT FEATURES:

a) It applies to all goods and services transactions.

b) It will be paid separately to the Centre and States' accounts.

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c) Central and state GST credit regulations would be matched. Cross-utilization of ITC
between the Central GST and the State GST is not permitted unless in the case of
interstate supply of commodities.

d) Cross-utilization of ITC between central and state GST is not permitted except for
interstate supply of commodities.

e) The Centre and States will have concurrent jurisdiction over the entire value chain and
all taxpayers, based on prescribed thresholds for products and services.

f) Taxpayers must submit a consistent format for periodic returns to both the Central and
State GST authorities.

g) Each taxpayer will be assigned a PAN-linked taxpayer identity number.

MODEL OF GST
The dual GST model proposed by the Empowered Committee and approved by the Centre
will have two systems for enforcing the tax. GST includes two components: central GST
and state GST.
Central excise duty, additional excise duty, services tax, and additional duty of customs
(similar to excise), state VAT, entertainment tax, taxes on lotteries, betting, and gaming,
and entry tax (not collected by local bodies) would all be included in GST.

TAXES AT THE CENTRE AND STATE LEVEL ARE BEING

SUBSUMED INTO GST

S. Subsumed under CGST Subsumed under SGST no.

1 Central Excise Duty VAT/Sales tax
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2 Additional Excise Duties Entertainment tax (unless it is
charged by the local bodies).
3 Excise Duty-Medicinal and Toiletries Luxury tax
preparation Act
4 Service Tax Taxes on lottery, betting and
gambling.
5 Additional CVD state Cesses and Surcharges
(supply of goods and services)
6 Special Additional Duty of customs-4% Entry tax not in lieu of octroi
7 Surcharges
8 Ceses

IGST full form is Integrated Goods and Services Tax.

Integrated GST (IGST) applies to interstate (between two states) transactions of goods and
services, as well as imports. This tax will be collected by the central government and
dispersed to the individual states. When a product or service is transported from one state
to another, it is subject to IGST. IGST is in place to ensure that a state just needs to deal
with the Union government when settling interstate tax payments, rather than with each
state separately. Let us try to grasp IGST with an example.

For example, Ramesh, a producer in Rajasthan, sold items for Rs 10,000 to Suresh in
Rajasthan. Since this is an interstate transaction, IGST will apply. Assume the GST rate
for the specified item is 18%. So, the Central Government's IGST fee will be Rs 1800 (18%
of Rs 10,000), but the refined rate of the commodity will be Rs 11,800.

UTGST full form is Union Territory Goods and Services Tax.

The Union Territory products and Services Tax, also known as UTGST, is the GST levied
on products and services supplied in any of India's five Union Territories, which include
the 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)

5
mentioned above. CGST + UTGST applies to any transaction of goods or services inside a
Union Territory.

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

Overview of goods and service tax

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Goods and Services Tax (GST) is an indirect or consumption tax levied in India on the
supply of goods and services. It is a comprehensive, multistage, destination-based tax,
which includes practically all indirect taxes with the exception of a few state levies.

The GST, which is multi-staged, is imposed at every stage of the production process, but it
is intended to be refunded to all parties in the various stages of production other than the
final consumer, and it is collected as a destination-based tax from the point of consumption
rather than the point of origin, as previous taxes were.

The tax went into force on July 1, 2017, when the Indian government implemented the one
hundred and first Amendment to India's Constitution. The GST replaced the many taxes
levied by the central and state governments

The GST council, which is made up of the federal government's finance minister and all of
the states, governs the tax rules, norms, and regulations. The GST is intended to replace a
myriad of indirect taxes with a single tax, reshaping the country's 2.4 trillion-dollar
economy; nevertheless, its execution has been criticized.

Positive impacts of the GST include a 20% decrease in interstate transportation due to the
disbandment of interstate checkpoints.

Goods and services tax are a national indirect tax that abolishes all other indirect taxes. It
is a comprehensive tax levied on the scale, production, and consumption of products and
services. Vishwanath Ratap Singh initiated the GST regime in 1986 during the Rajiv
Gandhi administration, however it was not approved by the Lok Sabha.

The GST Act was passed on March 29, 2017, and became effective on July 1, 2017. The
GST council governs the rules, regulations, and rates for all state and central finance
ministries.

"One tax for entire nation". Benefit under GST is tax on tax is removed and the cost of
goods decreased. GST removed cascading effect (tax on tax) on the scale of goods and
services which helps to decrease the cost of goods and services. Activities like returns,

7
refund registration response need to be done on the GST portal. This helps to speed up the
GST process.

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.

8
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 analyse how much we are going
to pay with GST.

TAXES THAT MAY OR MAY NOT BE SUBSUMED

• Taxes on petroleum products

• Taxes on alcoholic products

• Taxes on lottery and betting

• Basic customs duty and safeguard duties on import of goods into India

• Entry taxes charged by municipalities or panchayats

• Entertainments and Luxury taxes

• Electricity duties/taxes

• Stamp duties on immovable properties

• Taxes on vehicles

GST ADMINISTERED IN INDIA

Keeping in mind India's federal system, GST would be divided into two components:
Central GST (CGST) and State GST (SGST). The GST will be charged across the value
chain simultaneously by the Centre and the States. Each supply of goods and services will
be subject to taxation. The Centre would charge and collect Central Goods and Services
Tax (CGST), while States would charge and collect State Goods and Services Tax (SGST)
on all transactions taxed within their state. The CGST input tax credit would be available
to discharge the CGST liability on the output at each level. Similarly, credit for SGST paid
on inputs will be granted when paying SGST on output. It is important to note that no credit
cross-utilization is authorized.

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Rate of Tax

The Goods and Services Tax (GST) will be charged at various rates ranging from 0% to
28%. The GST Council approved a four-tier GST tax system of 5%, 12%, 18%, and 28%,
with lower rates for essential commodities and higher rates for luxury and de-merits goods,
which would also incur an additional cess.

Products attracted 5% GST rates.

Edible oil, sugar, lifesaving API, peat, all ores and concentrations. Kerosene PDS, Tar,
Coal, Ignite, Sand, lime bricks, and fly ash bricks. Steel utensils Branded paneer, branded
cereals, soybeans, groundnuts, sunflowers, coffee, tea, frozen veggies, sweetmeats, bakery
mixes, doughs, pizza bread Tea concentrates, sauces, soups, and vegetable fats and oils.
Handmade safety matches. Broomsticks, Sugar made from beets or cane, Coal and LPG
for household supply. Household copper articles, Copper utensils, Iron/steel/household
articles Iron/steel household items, iron/steel kerosene stoves. Nuclear fuel, heavy water,
and other nuclear fuels. Compressed air Solar water heaters Renewable energy devices
Vaccines for human or animal blood Geometry boxes

Products attracted 12% GST rates.

Fruit juices, formulations, sports products, bicycles, and spectacle lenses. Agar Bati, Butter,
ghee, cheese. Dry fruits. Frozen Meat Pencil sharpener, knives. Meat and seafood
preparations. Candles, Tooth Powder LED lights Milk beverages Ready to consume
namkeen/bhujiya. Aluminium utensils Steam, Children's Drawing Books, Ink for fountain
pens and ballpoint pens Wood pulp, calendars, power-driven water pumps. Fertilizers,
Tractors, Sewing and knitting needles, Work contracts Restaurants that serve alcohol and
do not have air conditioning Lighting (LED)

Products attracted 18% GST rates.

Financial Services, Telecom Services, Another API. Petroleum coke and petroleum
bitumen Nickel bars, highways, cables, and copper bars. Copper screws, nuts, bolts, nickel
screws, nuts, bolts, nickel tubes, pipes, and nets Aluminium ingots, roads, and wires Lead
plates, sheets, and strips Zinc goods, Tin bars and rods Cell phones, Whey Protein and
Fitness Supplements, Hats and headgear Preserved veggies, jams, jellies, infant care

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preparations, Pasta, Corn Flakes, Cakes Condensed Milk Toilet Paper Hot water bottles.
Petroleum jelly, paraffin wax, ice cream, fast food mixes, sharbat, Refined sugar. Soap,
toothpaste, Hair oil Industrial cables, Braille typewriters, padlocks, locks, helmets.
Telecom services, air conditioning, and restaurants that serve alcohol Petroleum jelly,
paraffin wax, ice cream, fast food mixes, sherbet, Refined sugar. Soap, toothpaste, Hair oil
Industrial cables, braille typewriters, padlocks, locks, helmets, telecom services, air
conditioning, and restaurants that serve alcohol.

Products attracted 28% GST rates.

Aerated drinks, luxury hotels, cement, and wallpaper. Paint and varnish, Putty, wall fillers.
Plaster, ceramic tiles Tempered glass, leather purses, yachts, air conditioners, refrigerators,
and storage water heaters. Dishwasher, printer, photocopier, fax machines. Wrist watches,
furniture Video game console Exercise equipment, Manicure and pedicure sets Perfumes,
Beauty or make-up preparations, Skincare products include sunscreen, shampoos, hair
creams, hair dyes, wigs, eyelashes, and artificial beards. Aluminium foil, cocoa butter, oils,
and chocolates Instant Aroma Coffee, Coffee concentrations and custard powder, Protein
concentrates, sugar syrups, razors, dental floss, toothpaste, deodorants, aftershave, shaving
cream, cement, and paints Stoves (except kerosene and LPG), electrical hot plates, rubber
tires, plastic items, cancerous stone, artists, students, or signboard coolers, pianos,
revolvers, artificial flowers, plastic products, five-star restaurants, air conditioners,
refrigerators, and coolers.

GST Council meeting:

The GST Council convened for the 31st time on December 22, 2018, Saturday at
Vigyan Bhavan.

Shri Arun Jaitley, the finance minister, chaired the meeting.

Highlights included rate changes, relief in the form of due date extensions, and clarity on
GST 2.0. Implementation and simplifying of GST compliance procedures such as return
filing, registration, and refunds on the site.

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GST Rates Rationalized:

• Today's GST rate drop will have an overall impact on income of Rs 5500 crore,
according to Jaitley.
• The Fitment committee reports' recommendations were considered at today's
meeting
• There has been no change in the tax rate on cement: 13 vehicle components and 8
cement sector goods are still subject to the 28% GST slab.

• Third-party insurance is now 12% GST Slab, down from 18% before.
• Six commodities and one service have been removed from the 28% GST Slab tax
band under the commodities and Services Tax (GST) regime.
• GST for cinema tickets costing less than Rs 100 has been cut from 18% to 12%.
GST Slab, for tickets priced at or above Rs 100, GST is decreased from 28% to
18%.
• Lithium-ion battery chargers, video game consoles, minor sports-related items, and
disabled carriage accessories have been removed off the 3% slab.

12
 • Items stated to be utilized by the upper categories, such as air conditioners and
dishwashers, will remain at the 28% GST slab.

• Bank charges (savings bank) and the Pradhan Mantri Jan Dhan Yojana have been
exempt from GST.
• GST rates on special pilgrim flights have been reduced to 5% for economy and 12%
for business class. These include non-scheduled/chartered operations for religious
pilgrimage, which Go I facilitate through bilateral agreements.

Overall, the expectations for the 31st GST Council meeting were:

• Deliberations on announcing GST rates for petrol and diesel.

• GST rate cuts are highly expected for the housing sector, with two proposals before
the Council:

1. To reduce the GST rate from 12% to 8%, in order to put it in line with the affordable
housing with ITC claim option.

2. Reduce the GST rate to 5% without the ITC claim option. • In the event of an

emergency, a decision will be made based on the reports given by the subcommittees
constituted to analyse GST on Sugar and Cess.

•
Speculation is high that the council will examine the plan, which could effectively
reduce the highest tax rate from 28% to 18%. Goods including cement, computer
monitors, and power banks, as well as services like third-party vehicle insurance,
will see rate reductions. The objective appears to be to rationalize GST rates by
eliminating items from the 28% slab and restricting them to sin or luxury goods.

•
Decision to simplify GSTR-9 annual returns
The 32nd GST Council Meeting The 32nd GST Council meeting was conducted on January
10, 2019 in Delhi. Shri Arun Jaitley, the finance minister, chaired the meeting.

GST Registration:

13
The basic exemption ceiling for suppliers of products will increase from Rs 20 lakhs to Rs
40 lakhs. However, this restriction remains at Rs 20 lakhs for service providers. The
registration limit for special category States is currently set at Rs 10 lakh. This ceiling has
been increased to Rs 20 lakhs in the event of goods supply, and such States have been given
the choice of choosing between the Rs 40 lakhs and Rs 20 lakhs threshold limits in a week's
time.

New Composition Scheme for Services Providers: Suppliers with a turnover of up to Rs 50

lakhs per year in the previous fiscal year, whether delivering independent services or a mix
of commodities and services, are eligible to participate. The tax rate is maintained at 6%
(3% CGST plus 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.

GST Rate Cuts:

• No changes in GST rates until revenue surges, as suggested by the GST council.

• There is no reduction in the GST rate for the sale of under-construction flats.
Instead, a seven-member panel of ministers is formed to investigate the effects of
lowering interest rates from 12% to 5% on the supply of such under-construction
properties.

• Furthermore, no GST rate reductions on private lottery distributions. A group of

ministers will be formed, including representatives from developing and selling
countries.

What were the original GST rules for restaurants?

The Indian government implemented the Goods and Services Tax (GST) in July 2017 to
correct tax payments on all goods and services. According to the previous declaration,

14
restaurants were divided into three separate restaurant GST rates. The GST rates were as
follows:

● 12% for restaurants without air conditioning.

● 18% for restaurants with air conditioning and a liquor license.

● 28% for restaurants in the five-star hotel category.

However, the Indian government let all restaurants to use the input tax credit.

GST rates on Food, Beverage Services, and Accommodation

Here is a detailed table to understand the GST rates on food, beverages, services and
accommodation.
Particular Applicable GST Rates

Food services by restaurants that may or may not have

5% with no Input Tax Credit
air conditioning (including takeaway)

Any food or drink served at the canteen/cafeteria/mess

operating on a contractual basis in an office, school,
5% with no Input Tax Credit
industrial unit, etc., when the contract is not occasional
or event-based

food services provided by a restaurant operating within a

18%
hotel with a room tariff of Rs 7,500 or more

Food services provided by a restaurant operating within

5% with no Input Tax Credit
a hotel with a room tariff of Rs 7,500 or less

Food service provided by the Indian railways on

5% with no Input Tax Credit
platforms and trains

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Food services provided by a licensed entity on a premise
utilized for organizing a function while renting the 18%
premise.
Food services provided at events, conferences,
exhibitions and indoor or outdoor functions that are
18%
occasional and event-based

Any other food, beverage service and accommodation 18%

GST on Food items

Here is a detailed table to understand the GST on restaurants for food items:
Particular Applicable GST
rate
GST on freeze/fresh vegetables NIL

GST on non-container dried leguminous packed vegetables(shelled),

NIL
whether skinned/split or not
GST on fruits such as apples, oranges, grapes, etc. NIL

GST on non-vegetarians’ food items (whether fresh or chilled) NIL

GST on eggs in shells (whether fresh, cooked or preserved) NIL

GST on cream, unsweetened milk (whether pasteurized or

NIL
unpasteurized)
GST on packed vegetables in a container (whether steamed, boiled or
NIL
uncooked)
GST on vegetables preserved using means unsuitable for immediate
NIL
human consumption
GST on contained packed meat having a brand name or trademark 5%

GST on eggs not in the shells or egg yolks cooked or boiled by steaming 5%

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GST on container-dried leguminous packed vegetables having a brand
5%
name or trademark () whether skinned/split or not)
GST on vegetables such as thyme, curry leaves, ginger (not fresh), etc. 12%

GST on vegetables, nuts, fruits and edible parts of plants that are
12%
preserved by a means
GST on flour-based food items, including less than 40% cocoa of total
18%
weight
GST on chocolate and chocolate-based products 18%

Impact of GST on Restaurant and Food Items

The Goods and Services Tax (GST) is a comprehensive tax system that has replaced many
indirect taxes in India. The GST on restaurants has had a tremendous influence on India's
restaurant and food business.

Here are some of the ways GST on restaurant services and food goods has impacted the
industry:

• Simplified taxation

GST on restaurants has simplified taxation by combining various taxes into a single charge.
GST on restaurant food has made it easier for restaurants and food enterprises to comply
with tax requirements while also lowering compliance costs.

However, current restaurant GST rates are greater than those imposed by the former tax
scheme. This has increased the tax burden on restaurants and food enterprises.

● Lower tax liability.

Restaurants and food enterprises can lower their tax obligation by claiming Input Tax
Credits for purchases under GST.

ST has improved transparency in the food industry by mandating enterprises to keep correct
records and file frequent tax returns, thereby reducing tax evasion and increasing
compliance.

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●Impact on Prices

GST on restaurants has had a mixed effect on prices in the restaurant and food industries.
While tax rates for certain items have risen, the Input Tax Credit has helped to cut prices
for others. The overall impact on prices has been moderate.

●Increased Transparency

ST has improved transparency in the food industry by mandating enterprises to keep correct
records and file frequent tax returns, thereby reducing tax evasion and increasing
compliance.

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.

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GST BIFURCATION AS PER RESTAURANT

Dhaba’s & 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.

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 industries 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

19
➤Laundry services

➤ Renting space for events, conference etc.

➤Business support service.

➤Beauty parlor.

➤ 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 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 a given grade may differ from a European or Asian hotel with the same
rating in terms of amenities, facility rates, and service quality. Star hotels offer decent and
large accommodations with high-class decoration, furnishings, and colour televisions, as
well as better-equipped guestrooms with telephones and one or more bars or lounges with
adjacent private bathrooms. The hotel business contributes significantly to the growth of
the services sector. This sector relies heavily on hospitality. Tourism and hotels pave the
path for India's exchange currency development. Star hotels in a variety of locations near
tourist attractions.

People from diverse countries all over the world want to stay and enjoy the entire day.
The luxury tax and combined service tax are fixed at 6% by different states. After GST,
the highest rate is 28%, which is less expensive; however, this GST only applies to star

20
hotels. According to industry sources, the typical total tax rate ranges from 18 to 22%.
Under the new GST, dining in a five-star hotel is more expensive. However, budget hotels
have been spared, with room prices of less than Rs.1000/- being nil and between (Rs.1000
to Rs.2500) at 12%. (Rs2500 to Rs5000) is 18%; over Rs.5000 is 28%.

GST IN HOTEL INDUSTRY

Prior to GST, the hotel business was subject to various taxes such as services tax, VAT,
and luxury tax, which added complexity to accounting. Tax rates were not uniform because
they were enforced by both state and federal governments. However, from July 1st, 2017,
all hotels and restaurants were subject to a single tax scheme. Now, all of India is subject
to a single tax rate, regardless of where they are located. GST must be paid by the taxable
person on the supply of goods and services. Section 9 of the model GST law defines a
taxable person as "any person who conducts business in any Indian state and is registered
or required to be registered under Schedule III of the Act."
Constitutional Validity of Service Tax on "Accommodation Services" "According to the
Model law on GST, which does not contain any exemptions or rates of taxation, it appears
that all services in relation to hotels and restaurants would be subject to GST levy because
they are to be treated as supplies."
Hotels and food service businesses in India are the fastest expanding. As a result, changes
in the tax collecting structure are having an impact on the business's development. The
implementation of the Goods and Services Tax has perplexed restaurateurs. The notion of
goods and services tax was developed to eliminate all extra money charging strategies that
were previously used by retailers to generate revenue. This reform will definitely reduce
the cost of consistency for taxpayers since under this system, operations will become
identical across states, and the tax structure would be harmonized.
The restaurant industry was plagued with several high-cost taxes and adjustments under
the old tax collection structure. Previously, consumers had to pay VAT, service tax, and an
additional service charge on each restaurant bill, but with GST, these superfluous and
needless taxes were removed. The GST taxation structure explicitly specified all of the
slabs, yet many eateries remain confused, and restaurant owners apply rates and taxes as
they see fit. This study looks at the influence of the GST composition plan on India's hotel

21
industry. This will provide us insights into how GST will work in this industry and allow
us to understand the benefits and downsides of GST in this regard. The analysis concludes
that GST has the hotel business has both advantages and disadvantages. GST has also had
an impact on various companies' promotional strategies, prompting them to seek alternate
promotional schemes.

Impact of GST on hotel sector.

 Replacing many levies with a single tax promotes tourism in India.

 Centralized registration is required in all states for hotels that operate independently
or through an agency.
 Provision for GST audit if the total turnover exceeds statutory limit.
 Hotels and restaurants must establish discount policies in advance, which should be
documented.
 Upload all receipts and invoices for inbound and outbound supplies into the system.
 Alcohol and electricity are out of the preview of GST. The hotel industry would be
unable to claim input credit for the two goods, which would have a detrimental
impact on the sector.
 Restaurants that are not registered cannot impose GST on food bills.

The ultimate GST rate for five-star hotels is either 28% or 18% The
star rating of the hotel does not affect the applicable GST rate.
1. The GST rate is 28% if the hotel room fee exceeds Rs.7500 per unit per day.

2. The GST rate is 18% if the hotel room charge 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 obligated to pay
GST (28%) regardless of the declared tariff of a unit of accommodation.
In this context, it is now stated that accommodation in any hotel, including 5-star hotels,
with a declared rate of less than INR 7500 per unit per day will be subject to GST at 18%.
The star rating of hotels is thus useless in determining the applicable GST rate.

22
Tax rate under GST for hotels and restaurant.

 Room accommodation: GST is free for rents under 1000, 12% for rents between
1000 and 2500, 18% for rents between 2500 and 7500, and 28% for rents beyond
7500.
 Food supply: Non-AC restaurants pay 12%, whereas AC restaurants pay 18% of the
food bill.  All restaurants serving alcohol, whether AC or non-AC, are subject to
an 18% levy on the bill.
 18% charge for business support services such as laundry, beauty parlor, gym, and
club facilities.

 Rent premises for events and conferences 18%.

 Tele communication facility 18%

Booking a hotel after GST rollout?

Here's how much you will pay

Last weekend, the GST Council amended hotel tax rates based on room pricing. The
adjustments implemented are modestly good for mid-tier hotels, while the premium class
may not see any influence.

23
Hotel prices between Rs 2,500 and Rs 7,500 would now be subject to a fixed GST rate of
18%, down from the previously projected 28%.
Currently, hotels who charge prices in this range pay 21-22% tax. Hotel prices above Rs
7,500 would be subject to a 28% GST charge. The GST council has also decreased the tax
rate on restaurants in five-star hotels to 18% from 28%.

This is on par with stand-alone air-conditioned eateries. Room prices less than Rs 1,000
are tax-free, while those between Rs 1000 and Rs 2,500 are subject to 12% GST. Analysts
note that there would be no significant impact on hotel profitability or cost savings across
categories.
Some argue that mid-sized hotels may pass on the nearly 3% difference between their
present and GST tax rates to guests by lowering accommodation rates.

24
CHAPTER NO :2 RESEARCH AND METHODOLOGY

2.1 Introduction to Research Methodology:

This chapter provides a detailed explanation of the research technique utilized in the study
of the application of Goods and Services Tax (GST) to the Impact of GST on Hotels.

Redman and Mory (2001) defined research as a systematic effort to acquire new
knowledge. In reality, research is defined as the art of scientific investigation. The research
technique is the strategy used to identify the research problem and collect information in a
methodical manner. It is based on the most efficient method of gathering meaningful
information at the lowest possible cost in order to achieve the results of an investigation.
Aside from that, it may be understood as a scientific discipline that examines how research
is conducted scientifically.

This chapter will discuss the research methodology. It is also a critical component in
achieving the decision's objective, which must be clear, accurate, and reliable. In this
chapter, we can observe that the steps are commonly customized to understand how to
gather, analyse, and evaluate data. It discusses research design, research procedure,
demographic and sampling, data aggregation techniques, instrument creation, and data
analysis methods used. The goal of this chapter is to outline the study's research
methodology, explain sample selection, detail the procedure for designing the instrument
and collecting data, and explain the statistical procedure used to analyse the data. The
questionnaire study approach was employed to investigate the implementation and impact
of the Goods and Services Tax (GST) on hotels.

DEFINITION:
A detailed outline of how an investigation will take place. A research design will typically
include how data is to be collected, what instruments will be employed, how the
instruments will be used and the intended means for analysing data collected.

The research methodology defines what the activity of research is, how to proceed, how to
measure progress, and what constitutes success. It provides us an advancement of wealth

25
of human knowledge, tools of the trade to carry out research, tools to look at things in life
objectively; develops a critical and scientific attitude, disciplined thinking to observe
objectively (scientific deduction and inductive thinking); skills of research particularly in
the age of information". The research methodology is a science that studying how research
is done scientifically. It is the way to systematically solve the research problem by logically
adopting various steps. Also, it defines the way in which the data are collected in a research
project.

2.2 Research Design

study design is the logical and methodical approach to designing and guiding a piece of
study. It is the general plan for how the researcher wants to put their projects into practice.
It is also defined as the setting up of settings for data collecting and analysis with the goal
of combining relevance to the research purpose in the technique. The goal of research
design is to ensure that the evidence we collect allows us to clearly answer the initial
objective.

There are various sorts of study designs, including pre-experimental designs. The PR
experimental design includes three frequent designs: one-short case study, one group
protest to the post-test design, and intact group comparison.

This study uses a single brief case study design. It depends on which group is treated, and
just one observation is performed. One brief case study means that only one group is
exposed to the treatment, and only a post-test is used to observe or quantify the treatment's
influence on the dependent variable within the experimental group. This design does not
include a control group because it is only applied to one group. In this study, the
independent variables are General Insurance Company, such as insurers, customers, and
agents, and the dependent variables are goods and service tax (GST), which is influenced
by the independent variables, and to ensure that there is a correlation between the two
variables.

26
DATA COLLECTION METHOD

Data is one of the most important parts of any research study. Every research is based on
data, which is then analysed and evaluated to obtain information. There are two sources of
data. Primary data gathering uses surveys, questionnaires, experiments, or direct
observations, whereas secondary data collection collects information from a variety of
papers or electronically stored information. This research study will use two types of data
collecting: primary data and secondary data collection.

PRIMARY DATA

Primary data are those collected from the field under the control and supervision of an
investigator. Primary data refers to original data that has been obtained specifically for the
purpose in mind. This type of data is typically fresh and was acquired for the first time. It
is useful investigations. This study's data gathering tool is a questionnaire. The
questionnaire is the most common data collection technique used by past researchers in
surveys. The answers will be gathered using a questionnaire completed by the insurer,
customers, and hotel proprietors in Panvel.

27
The questionnaire was distributed to a random company via Google Forms and email to the
company. The questionnaire employed in this study does not interfere with the respondent's
daily routine because it just takes a few minutes to complete. A questionnaire consists of a
series of questions, either open-ended or closed-ended, to which respondents respond based
on their cognition. For this survey, the questionnaire is in the form of a closed-ended
question, in which the respondent is requested to select an answer from a list and enter it
on the specified response scale.

Secondary Data

Secondary data refers to data that has already been collected and is readily available from
other sources. Such data are less expensive and faster to get than primary data, and they
may be available even when primary data is unavailable. When primary data cannot be
collected, the researcher will look for secondary data sources. We can obtain secondary
data based on our search by going through certain sources, such as the designated source,
whether it has been printed or not. Secondary data is used in research to gain a better
understanding of a topic and to provide a clear insight and perspective on the current
investigation. Secondary data was acquired from a variety of sources, including the internet
(google.com), newspapers, and GST books used by chartered accountants (CA).

28
2.3 Significance of research

1. Governments:

The hotel business contributes significantly to the country's national income. GST will have
both positive and bad effects on the hotel industry. The government should charge an
accurate GST rate on hotel services and meals; otherwise, it could have a detrimental
impact on national income, GDP, employment, and per capita income.

2. Economy:

GST will streamline India's tax structure, widen the revenue base, and establish a shared
market across states. This will promote compliance and boost India's tax-to-GDP ratio.
According to a survey from the National Council of Applied Economic Research, GST is
predicted to boost economic growth by 0.9% to 1.7%. Exports are predicted to rise by 3.2%
to 6.3%, while imports will rise by 2.4-4.7 percent. As a result, it is vital to investigate how
this may affect the hotel industry.

3. Hotels:

GST is a single indirect tax levied on food and lodging expenses in hotels. It will have an
impact on hotel revenue, food sales, services, and room rates. As a result, the impact of the
hotel industry must be studied.

4. Customers:

Because GST is a single indirect tax levied on consumer bills, it contributes to the hotel
industry's customer base growth. Hence, the study is relevant.
2.4 GST for the Hotel Industry:

The head office, located in Mohali, is the top assurance and consulting business. Positioned
to assist with GST in India. It is a 400-person workforce, including 75 professionals with
industry backgrounds and experience. GST was introduced in 1991 to replace the federal
sales tax. GST is levied at rates ranging from 13% to 15%, with others at 5%. When interest
rates were raised, the tax-to-GDP ratio climbed and then dropped, before steadily declining.
GST, which was instituted in 1985, has a peak rate of 15%. In the 2014 Constitutional law,

29
the tax rates were as follows: concessional 12%, normal 1718%, and luxury rate 40%.GST
on the global perspective ranges from 31% to 36%.

Hotels and tourists are currently subject to a variety of taxes, including VAT, output service
tax, and luxury tax. The VAT varies from state to state and ranges from 12 to 14.5%.
Similarly, luxury taxes are based on the proportion of room tariff and typically range from
0 to 12%. Service tax fluctuates based on the service. Food rates typically account for 8.7
percent of the entire accommodation cost, but they vary by location. For food and
beverages, service accounts for 40% of the bill, which equals 5.8 percent of the total bill.
For hotel reservations for events like as weddings, ceremonies, and meetings, a 30%
discount is provided, and the effective service tax is 10.5% of the total fee.

The structure is 5%, 12%, 18%, and 28%, with the service sector taxed at 18%. The
proposed 5% food tax is a positive step towards subsuming taxes for hotels and restaurants.

However, the 18% fee on services or lodging revenue, in comparison to neighbouring

nations that charge a tourism tax ranging from 4 to 7%, prevents fair competition. The
Federation of Associations in Indian Tourism and Hospitality has suggested up revisions
to the proposed goods and services tax law.

This supports an exception for tourist and hospitality businesses. It has been demonstrated
that most countries acknowledge tourism as a significant economic engine and maintain a
tourism rate that is less than 50% of the standard rate for other industries

How will the GST work?

The GST's new tax structure will take effect in April 2017. Once this occurs, all state and
national taxes levied on goods and services, such as excise duty, VAT, service tax, luxury
tax, entertainment tax, and so on, will be combined into a single tax with two components,
namely state GST and central GST. The GST rate is calculated by dividing each of these
taxes uniformly. The projected GST rate is likely to be 18%. In the current non-GST
regime, indirect taxes on products range from 27 to 32%, while services are taxed at 15%.

30
How will this impact goods and services?

Following GST adoption, the cost of commodities is projected to fall but the cost of services
is likely to rise. However, the overall burden of taxes on consumers will be greatly reduced.
Buyers should expect to pay less for compact automobiles, two-wheelers, movie tickets,
groceries, and consumer goods, while mobile phones, airline tickets, and insurance
premiums will rise in price. A few exclusions to the GST bill include alcohol, electricity,
tobacco, and petroleum products.

Impact on Hotels:

Section 4 deals with how GST affects hotels and restaurants. The GST rate is 5% for
restaurants with an annual sale of less than Rs. 50 lakhs. Dinner in non-air-conditioned
small restaurants is 12%. Dinner at air-conditioned restaurants is 18% (eating with a liquor
license). Dinner at a three- or five-star restaurant costs 28%. All of the abovementioned
hotels, inns, guesthouses, clubs, campsites, or other commercial establishments, grant
homes, and villas are eligible for input tax credit. Currently, hotels are subject to a variety
of taxes. There are three taxes paid on hotels: VAT, luxury tax by state, and service tax by
centre. These taxes rise to 28% after implementation, and several taxes are replaced with a
single tax of 17 to 19%.

Negative Impact:

The imposition of a service tax on room tariffs restaurants, which will be passed on to the
end customer, is likely to have a negative influence on demand because it raises the
effective consumer cost. However, the implementation of GST could mitigate this impact.
The incremental tax on air travel will also increase the travel bill, but the amount of the
same will be minor.

SCOPE OF THE STUDY:

GST applies to all goods and services, with the exception of alcoholic liquor for human
consumption. Petroleum and petroleum products are exempt from the Goods and Services
Tax charge until a date determined by the Goods and Services Tax Council's proposal.

Promulgation of GST Council: Proposed Article 279A of the Bill establishes the Goods
and Services Tax Council to investigate goods and services tax issues and offer
31
recommendations to the Union and States on factors such as rates, exemption list, and
threshold limits. The Union Finance Minister will chair the Council, which will be made
up of State Union Ministers.

• All goods and services are covered under the GST Regime, except alcohol for
human consumption.
• Tobacco products are subject to levy of GST, and the Centre may additionally
collect excise duty.
• The GST Council has yet to determine the incidence and charge of GST on the
following:

○ a) Crude petroleum.

○ b) High-Speed Diesel

○ c) Motor Spirit (petrol)

○ d) Natural gas
○ e) Aircraft turbine fuel

SAMPLING:

My working area was in Panvel, Navi Mumbai. I obtained my data from a restaurant in
Panvel. As we know, those who work in the restaurant industry are either salaried or own
their own businesses. I targeted the GST team, which included the tax department, as well
as individuals who had an impact on GST.

Sampling unit:

My sampling unit includes people who worked in the restaurant industry. For example, the
proprietor of a restaurant.

Size of sampling:

The number of individuals surveyed. The sample consisted of branch owners, employees,
and customers from ten restaurants.

Sampling procedure:

32
Data were acquired through personal interaction. I spoke with 10 restaurant owners. I met
several employees and owners who immediately resonated with the concerns highlighted
in the questionnaire and spread information regarding GST applications in their company.

Tools and techniques:

In this experiment, the questionnaire used Likert's scale to establish scores. A Likert scale
is a psychometric measure that is often used in research surveys for employees. It is the
most commonly used method of scaling answer in survey research; hence the term is
frequently used interchangeably with rating scale or, more correctly, Likert's scale, despite
the fact that the two are not synonyms. The scale is named for its creator, psychologist
Resilient.

The statements/items for the questionnaire were developed after reviewing relevant
literature. The survey form also contained a section for capturing respondents' general
profiles. They were asked about their environmental conditions, whether they needed
assistance from headquarters, and how customers responded, among other things

33
2.5 OBJECTIVES OF THE STUDY:

 To raise awareness among persons involved in the restaurant industry.

 To understand the notion of GST on restaurants.
 To investigate the aspects of GST and Restaurant.
 To assess the positive and negative effects of GST on the restaurant business.  To
provide information for further GST study.

Limitation of the study:

Due to time constraints, the study duration is limited to only two months. As a result, we
were unable to obtain much more information about the hotel industry.

The study is limited to Panvel. There are five-star, three-star, one-star, and two-star resorts,
as well as heritage, luxury, cottage, and residency options. The study is limited to the luxury
heritage resort.

Meaning of Hypothesis:

The term hypothesis is derived from the Greek words hypo (under) and tithes (to put),
implying that when the hypothesis is placed beneath the facts as a foundation, they tend to
support one another. It presents a hypothesized explanation that can be confirmed or
disputed through testing. A hypothesis is a proposed solution to the problem.

34
Definitions of hypothesis:

According to Rummel and Ballina A hypothesis is a proposition that can be tested and then
verified or rejected.

HYPOTHESIS:

Ho: The GST has a favorable influence on the hotel industry.

H1: GST has a negative influence on the hotel industry.

H0: Cost of rooms and Food have not increased after implementation of GST.

H1: Cost of rooms and Food have increased after implementation of GST.

H0: Quality of Services has not improved after GST in Hotels.

H1: Quality of Services has improved after GST in Hotels.

H0: Financial Performance has not improved after implementation of GST in Hotel
Industry.

H1: Financial Performance has improved after implementation of GST in Hotel Industry.

H0: Sale of food has not increased after implementation of GST in Hotel Industry.

H1: Sale of food has increased after implementation of GST in Hotel Industry.

H0: After GST, Input Tax Credit is not available to hotels.

H1: After GST, Input Tax Credit is available to hotels.

35
CHAPTER NO:3 (REVIEW OF LITERATURE)

The planned GST is expected to alter the entire landscape of the current indirect tax system.
It is considered the largest tax change since 1947. Currently, India has a convoluted indirect
tax system that includes levies levied by unions and states independently. GST will unite
all indirect taxes under one umbrella, resulting in a smooth national market. According to
experts, GST will help the economy grow more efficiently by enhancing tax collection,
since it will eliminate all tax barriers between states and integrate the country through a
single tax rate.

France adopted GST in 1954, and 140 other nations have since followed suit. The majority
of countries used unified GST, while some, such as Brazil and Canada, used a dual GST
system in which taxes were levied by both the federal and provincial governments. In India,
a dual GST system is planned, incorporating CGST and SGST.

i) IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-

ISSN: 2319-7668 pp. 49–52www.iosrjournals.org Taxation in India: Recent Trends and
Developments 49 Page Organized by Amrita Vishwa Vidyapeetham, Mysore Campus on
the theme "A Study on the Problems of Goods and Services Tax on Hotel Industry in
Mysore District" by Shana and Rohit Bhat, Department of Management and Commerce
Amrita Vishwa Vidyapeetham, Mysuru.- According to the analyzed data, the impact of
GST on customers is primarily determined by their income, gender, and age. When it
comes to the age issue, it is clear that both male and female respondents had similar
perspectives on GST rates and their impact on various hotels. In terms of income, it is
possible to conclude that clients have opposing views on GST rates in various hotels. It is
also demonstrated that lower-income customers have a financial strain when paying greater
GST in very localized hotels.

ii) Pacific Business Review International Volume 9, Issue 8, February 2017. On the
topic "Measuring Awareness about Implementation of GST: A Survey of Small Business
Owners of Rajasthan" by Vineet Chouhan, Pushpkant Shakdwipee, and Shagufta Khan
According to the paper's objectives, the level of GST awareness among small business
owners in Rajasthan state was discovered, and the primary areas to work on include training
and computer software availability. The majority of respondents projected that issues such

36
as clients/customers refusing to pay GST and having difficulty submitting reports to the
Authority would rise. Small business owners are also more interested in creating and
participating in training than in resolving complaints through consumer protection laws.

iii) International Journal of Innovative Research and Advanced Studies (IJIRAS)

Volume 5 Issue 3, March 2018 ISSN: 2394-4404 on the topic "Impact of GST on Different
Sectors of Indian Economy" by Dr. Meenu Baliyan Punjika Rathi GST would provide the
Indian economy with a strong and sophisticated tax structure to promote economic
development. However, in order to reap these benefits, the government must first establish
a solid framework. The goal of GST is to replace VAT; GST will eliminate all of the
complexity that exist in the current indirect tax structure. It will provide relief to a variety
of groups, including consumers, manufacturers, and government.

ISSN. 0972-8406 The NEHU Journal, Vol XIV, No. 1, January - June 2016, pp. 51-67 on
the topic "Transition to the Goods and Services Tax (GST) Regime: Rationale and
Impasse" by Sanjoy Roy GST has been demonstrated to be a better tax structure due to its
buoyancy, elasticity, and efficiency. GST is robust because tax revenue as a percentage of
GDP will increase. It is elastic because tax revenue increases as coverage and taxation rates
vary. It is regarded as efficient because the cost of collection will be low, and economic
distortions will be minimal.

The International Journal of Research in Economics and Social Sciences (IJRESS)

Available online at http://euroasiapub.org. Vol. 7, Issue 9, September 2017, pp. 28–39.
ISSN(o): 2249-7382. Impact Factor: 6.939. Ms. Himanil Dr. Meenu Jain2 discusses "GST-
A Driver of India's Economic Growth" - A well-designed GST is an appealing way for
eliminating the distortions caused by the current multiple taxes’ procedure. The planned
GST regime represents a half-hearted attempt to rationalize the indirect tax structure. At
the same time, the government should try to protect India's large poor population from the
expected inflation caused by the adoption of GST. Without a doubt, GST will simplify the
existing indirect tax system and help to address inefficiencies produced by the existing
heterogeneous taxation structure, but only if there is a clear agreement on the threshold
limit, revenue rate, and inclusion of petroleum products, electricity, liquor, and real estate.

37
PURPOSE OF A LITERATURE REVIEW

A literature review situated our topic in relation to previous researches and illuminates a
spot for our research. It accomplishes several goals -

Provide a context for the research

• Identify seminal works and scholars in the field

• Acknowledge existing theories, points of view, hypotheses, etc. In the field of
research
• Justify the research
• Clear up misconceptions about previous research
• Ensure the research has not been done before (or if it is repeated, that it is marked
as a "replication study")
• Show where the research fits into the existing body of knowledge
• Enable the researcher to learn from previous theory on the subject
• Illustrate how the subject has been previously studied
• Highlight flaws in previous research
• Outline gaps in previous research
• Show that the work is adding to the understanding and knowledge of the field
• Help refine the topic, refocus the topic, or even contribute to the topic's evolution.

Since the reform is of recent origin, the number of studies done on this area is sparse.
However, an attempt has been made to consolidate the available studies and present the
relevant opinions and findings.

INDIAN REVIEW

• Vineet Chauhan (2017).

Conduct a study on measuring public awareness of GST implementation." A

comprehensive survey of 66 small business units in Rajasthan State, India. The survey
intends to assess business owners' understanding of the GST problems they experience in

38
order to determine the present level of awareness. 148 small business owners were
surveyed to determine their understanding of GST in Rajasthan, as well as the type and
extent of relief provided and the application of the GST Law provisions.

• Poonam (2017)

The greatest flaws in the Indian tax system, such as the cascading effect, tax evasion, and
distortion, can be mitigated by implementing GST. After the merging of municipal, state,
and federal taxes, the competitiveness of industries, exporters, and businesses will improve.
The additional cash gained by broadening the tax base structure can be used to support
national growth. Tax policies have a significant impact on efficiency and equity in the
economy. Indirect tax reforms have been an essential component of the liberalization
process since new economic reforms.

• Times of India (26 July 2017).

It is reported that sweet makers are perplexed about determining the tax for their products
because the ingredients used in the sweets are taxed separately as raw materials and as
completed items, the taxation is different. Plain burfi is 5% taxed, while chocolate burfi is
fixed at 28%. Plain burfi combined with other dry fruits contains 12%. This taxation
method causes confusion among sweet makers about how much GST should be fixed for
each product.

• Times of India (July 27, 2017

It was stated that the GST implications for the same goods in different locations differed
significantly, which surprised the consumers. For example, a Rasamalai sold at a store
counter is taxed at 5%, but if it is served at a hotel, it is taxed at 18%. This has resulted in
a disparity in the number of consumers shopping for similar products.

• Dr. G. Gabriel Prabhu

GST is already in effect, and businesses are still figuring out how to make the necessary
changes to their present systems to fit the new compliance approach. On this note, we
present our impact study of something very close to our hearts, or rather to our stomachs:
the restaurant and food industry. Here, we will attempt to describe how the restaurant bill

39
will appear under GST, as well as the repercussions for end consumers, proprietors, and
the industry as a whole.

Dr. Manjunath, et al. (2016)

"Customer satisfaction in the fast-food industry". The study's goal is to identify the main
success criteria for the fast-food sector in the Mysore district region, as well as the critical
factors or determinants of consumer satisfaction in Mysore district's restaurant industry.
The data revealed that service quality and physical design are the most important
determinants for satisfaction in the fast-food industry in my sore district.

Jonathan, et al. (2017):

"The Impact of GST in Hotels and Restaurants".

The study's goal is to determine how the restaurant bill will appear under GST and what
the ramifications are for end consumers, the owner, and the industry as a whole. The
findings found that hotels are subject to a GST of 28% (14% CGST+14% SGST), compared
to an effective rate of 21% under the current indirect tax scheme.

• Dash. A Volume 3 Issue 5 May 2017

"Positive and negative impact of GST on Indian economy". The study's goal is to
understand the concept of GST, to investigate its aspects, to provide information for future
GST research, and to assess the benefits and challenges of GST. Credits for input taxes
paid at each stage will be accessible at the next stage of value addition, making GST
basically a tax on value addition at each stage.

• Alka Shah (2nd November 2017)

"Integrated Goods and services tax an Indian innovation”. The goal of the project is to
cross-utilize credit and make changes between the centre and the states. The paper focuses
on the key provisions for defining the place of supply of goods/services and the form of
supply, such as interstate or intrastate.

• Impact of GST on Consumer Spending Behaviour: A Study of Hotels and

Restaurants in Maharashtra" - by Jain, M., & Agarwal, A. (2018), Journal of
Retailing and Consumer Services.

40
The study titled "Impact of GST on Consumer Spending Behaviour: A Study of Hotels and
Restaurants in Maharashtra" by Jain, M., & Agarwal, A. (2018), published in the Journal
of Retailing and Consumer Services, investigates how the implementation of Goods and
Services Tax (GST) has affected consumer spending behaviour in hotels and restaurants
within Maharashtra. The research explores changes in consumer preferences, dining habits,
and expenditure patterns following the introduction of GST. It examines factors such as
alterations in menu prices, perceived value for money, and overall dining experiences in
the post-GST era.

Through surveys, interviews, or observational data, the study provides insights into the
extent to which GST has influenced consumer decision-making processes related to dining
out in Maharashtra. Additionally, it may analyse demographic differences or segment-
specific trends in consumer spending behaviour in response to GST. Overall, the article
contributes to understanding the impact of GST on consumer behaviour within the
hospitality sector in Maharashtra, providing valuable insights for businesses, policymakers,
and researchers alike.

• The Role of GST in Shaping the Future of Maharashtra's Hospitality

Industry" - by Gupta, K., & Patel, R. (2020), Journal of Hotel and Business
Management.

The article titled "The Role of GST in Shaping the Future of Maharashtra's Hospitality
Industry" by Gupta, K., & Patel, R. (2020), published in the Journal of Hotel and Business
Management, delves into the transformative effects of Goods and Services Tax (GST) on
the future trajectory of Maharashtra's hospitality sector.

By analysing industry trends, regulatory changes, and market dynamics, the study explores
how GST has influenced the strategic direction and operational landscape of hotels and
restaurants in Maharashtra. It discusses the implications of GST on pricing strategies, cost
structures, and competitiveness within the hospitality industry.

Furthermore, the research investigates the role of GST in shaping investment decisions,
technological innovations, and market positioning strategies adopted by stakeholders in
Maharashtra's hospitality sector. It may also examine the impact of GST on market
consolidation, business collaborations, and customer preferences.

41
Through a comprehensive analysis, the article offers valuable insights into the long-term
implications of GST for the growth, sustainability, and competitiveness of Maharashtra's
hospitality industry, providing strategic guidance for businesses and policymakers
navigating the evolving regulatory environment.

• Challenges and Opportunities for Small and Medium-Sized Enterprises in

Maharashtra's Hospitality Sector Post-GST" - by Singh, R., & Choudhary, S. (2018),
Small Business Economics.

The article "GST and the Changing Dynamics of Food and Beverage Industry in
Maharashtra: A Case Study Approach" by Shah, A., & Gupta, P. (2019), published in the
Journal of Foodservice Business Research, employs a case study approach to investigate
the impact of Goods and Services Tax (GST) on the food and beverage industry in
Maharashtra.

Through in-depth case studies of select food and beverage businesses in Maharashtra, the
research explores how GST implementation has influenced various aspects of the industry,
including pricing strategies, supply chain dynamics, and consumer behaviour.

The study examines how food and beverage businesses have adapted their operations,
marketing strategies, and pricing structures in response to GST. It also analyses the
challenges encountered by industry players in navigating the regulatory changes and the
opportunities that have emerged as a result of GST implementation.

By providing real-world insights from case studies, the article offers a nuanced
understanding of the evolving dynamics within Maharashtra's food and beverage industry
under the GST regime, contributing valuable insights for industry practitioners,
policymakers, and researchers alike.

Jai Prakash (2014).

According to his research study, the GST at the central and state levels is expected to
provide more relief to industry, trade, agriculture, and consumers through a more
comprehensive and broad coverage of input and service tax set-offs, the consolidation of
several taxes into the GST, and the phasing out of GST. Responses of industry and also of

42
trade have been indeed encouraging. Thus, GST offers us the best opinion to broaden our
tax base and we should not miss this opportunity to introduce it when the circumstances
are quite favourable and economy is enjoying steady growth with only mid inflation.

NIKITHA GUPTA (2014)

In her analysis, she concluded that the application of GST in the Indian framework will
lead to commercial benefits that were previously unaccounted for by the system and would
fundamentally lead to economic progress.

Faizan Bhai (2019) concluded in his paper "Impact of GST on various aspects of restaurant
and hotel business in Ananad and Nadiad District at Gujarat state" that hotel and restaurant
earnings stays consistent even after GST introduction. He believes there is a neutral
influence on compliance costs and a negative impact on the budget and financial situation,
as well as the necessity for working capital in the hotel industry.2

Nitin Kumar (2020) conducted research on "Customers Perceptions of Goods and Services
Tax (GST) in the Jind region of Haryana." He discovered that a strong understanding
among customers is vital since it can create a positive perception of tax policy. As a result,
the researcher proposed that the government make more efforts to ensure that customers
understand GST and establish a positive perception of it, which will lead to its adoption.3

ANN ABRAНАM (2019).

The goods and services tax system were implemented in India to address flaws in the
indirect tax system and to create a single market across the country. The implementation
of GST rates in hotels was initially met with criticism from hoteliers. However, after the
updated tariffs were applied on November 15, 2017, the majority of hoteliers voiced
confidence in the system. Even though the majority of hotels have faced increased costs in
moving to the new system, GST is projected to be helpful in the long run, bringing the ideal
of "one nation, one tax" to fruition. GST is likely to be advantageous in the long run,
bringing the dream of "one nation, one tax" closer to reality.

43
Renuka R. (2018)
The tour packages, both domestic and international, will increase by 4.5% to 5% as a result
of GST, but the impact of the increase will not be seen until after implementation. This is
the best response to the consumer by demonstrating the extreme advantages over the
service tax, which saw a doubling of the rate from 4.5% to 9%. The visitors and hospitality
business in India is fast developing; it will be US$ 280.5 billion by 2026, and the initial
phase of GST establishment is particularly tension-creating time, which is very destructive
to the growth. In any event, it remains to be seen whether the disadvantages outweigh the
advantages for this segment.

ASWATHY, KRISHNA (2018)

Studied GST comprises a standard tax system, and all states had their own taxes before the
restaurant industry was burdened with numerous tax collections. The tax duality has been
abolished. It also helps to improve financial management. Hopefully, GST will help to
overcome the problem of money transactions and enable the hotel business to continue
operations.

Dhanuka (2018).
According to the statement, this decision would benefit consumers and increase the
convenience of conducting business by allowing hotels to offer improvements to customers
without worry of being charged 28% GST.
SHARMA (2017).
Supported this and noted that GST will be an effective weapon for closing loopholes in the
current taxing system while also providing benefits such as improved GDP, employment,
better markets, more exports, and so on.

PANDEY (2017)

Said that the GST rates applicable to Indian hotels were extremely exorbitant as compared
to their Asian competitors. This could have a negative long-term impact on the hospitality
business. While Japan puts an 8% tax on the hospitality industry and Singapore levies a 7%
tax, India is clearly at a disadvantage.

44
PINKY (2014).
He stated that if a large-scale reform is to be successful, it must be supported by a strong
IT infrastructure. An online post named "effect of GST on Hospitality Industry" concluded
that "GST is a mixed bag of better and easier laws and regulations, as well as increased
expenses and compliances. Another article indicated that luxury hotels may experience a
decline in occupancy in the next months due to a big increase in their pricing, but other
hotels will remain unchanged.

FEDERATION OF HOTELS AND RESTAURANTS ASSOCIATIPN OF

INDIA (2015)
In contrast to the preceding remark, an industry that has been suffering difficulty for the
past two years is owing to ongoing global uncertainties and a domestic downturn. The
industry's long-term potential is quickly increasing, and the implementation of GST will
aid in this growth. In contrast, imposing high tax rates will harm consumers. The Federation
of Hotels and Restaurants Association of India (FHRAI) completely supports the bill's
introduction, with the only proviso that the composite rate burden be limited to 8%. The
association's president believes that this will help the industry flourish.

The Hotel and Restaurant Association of Eastern India (HRAEI)

HRAEI is concerned that if GST rates rise to the predicted levels of 16% to 20%, it will be
prohibitively expensive for the hospitality industry and will have a negative impact on
hotels and restaurants. Members of the group believe that rates in the hospitality sector
should be limited to 10%; else, turnover would begin to decline. The hospitality business
will not benefit significantly from GST because their input credit will be much lower than
the tax paid, as the majority of any hotel's input expense is labour (Poddar, 2015).

CHAURSIA (2016)
Stated that the implementation of GST would boost the Indian economy by more than two
per cent.

45
MEHTA (2015)
After the execution of GST there will be increase on the GDP from 1.5% to 2% due to cost
reduction and other changes made in tax system, it will also make impossible transactions
of the black money as it can only be routed through legal ways.

ZHONG (2015). The idea of replacing a patchwork of taxes with a single countrywide
sales charge, as well as removing economic obstacles, the government study believes that
broad GST will offer an instantaneous 1% to 2% increase in output and long-term benefits
in productivity. It could be an excellent strategy to curb black money and a decent attempt
by the Indian government following the demonetization of currency in 2016.

KUMAR (MAY 2014) According to researchers, the government of India should study
the GST regimes used by other nations, as well as their consequences, before implementing
GST. It is imperative that the government make efforts to protect India's massive poor
population from inflation caused by the adoption of GST. GST is imposed on all items and
services except those that are exempt. There is a dual model of GST, which includes central
GST collected by the center and state GST collected by the state.

GARG (2014)
The challenges faced in implementing the GST bill include tax thresholds, the nature of
taxes, the variety of statutes enacted, tax rates, tax management, and infrastructure, whereas
the opportunities include an end to cascading impact, revenue growth in states and the
union, reduced transaction costs and unnecessary wastes, a single point of taxation, the
avoidance of multiple taxes, a lower average tax burden, and reduced corruption. All areas
of the economy need to bear the impact of GST. GST would immediately affect all sectors
of the economy, including large, medium, and small businesses, middlemen, importers,
exporters, merchants, professionals, and customers.

AGOGO MAWULI (May 2014)

The study "Goods and Service Tax- An Appraisal" concluded that GST is not beneficial to
low-income nations and does not create broad-based growth. If these countries continue to
apply GST, the rate should be less than 10% in order to promote growth.

46
Pinki, Supriya Kamma, and Richa Verma (JULY 2014)
The study "Goods and Service Tax - Panacea for Indirect Tax System in India" concluded
that the new NDA government in India is supportive of GST implementation, which will
benefit the central government, state governments, and consumers in the long run if it is
supported by strong IT infrastructure.

The research report (Adhana, 2015) found that the government should be extremely
explicit about the fact that in order for GST to function correctly, information
technology/infrastructure must be created throughout India. The government should assure
the state government that it would implement the GST. Furthermore, every effort should
be taken to cover all things under GST so that no item is left out of the GST preview;
otherwise, the goal of adopting GST will be defeated

Bhattacharjee (2018) assesses the impact of GST one year after its adoption. It emphasizes
that government officials and experts are now considering the need to make several changes
to the GST architecture, such as eliminating the 28% tax bracket and shifting to fewer tax
slabs by merging the 12% and 18% rates, as well as bringing electricity, real estate, and
petroleum products under its purview in a systematic way. It also simplifies the submission
process by eliminating the obligation to submit so many returns at such short intervals,
while also boosting the strength of anti-evasion procedures.

According to the research paper (Nayyar, 2018), GST will affect all sectors in India,
including manufacturing, services, telecom, automobiles, and small and medium-sized
enterprises. One of the most significant tax reforms is GST, which would link the entire
country to a single taxing rate. Experts expect that GST will improve tax collections, boost
India's economic development, and eliminate all tax barriers between the states and the
central government.

The research article (Sehrawat, 2015) focuses on the benefits of GST and the problems
that India has in implementation. It also emphasizes that its implementation represents a
coherent tax structure that will absorb the majority of current indirect taxes, resulting in
increased output, more job possibilities, and a thriving GDP in the long run.

47
The research paper (Dr. D. Amutha, 2018) discusses the economic repercussions of GST
implementation in the Indian economy. The article also examines future GST predictions
and implementation challenges. It argues that GST is a huge concept that simplifies India's
current tax system.

The study report (Nisa, 2017) examines the impact of GST on India's overseas trade. It
emphasizes how GST will make life easier for Indian firms as the country's common
national market develops. With reduced transit time and costs, 'Made in India' items would
become more cost competitive in global markets.

Pankaj Chand the authors of the study have investigated the concept of GST, the need to
adopt it in India, the challenges in implementing it in India, and suggestions for overcoming
them. The study also highlights the benefits of implementing GST as soon as possible. The
writers have addressed the various alternatives for introducing dual GST in India, which
include concurrent dual GST, national GST, and state GST. Under concurrent dual GST,
the optimum choice was to apply GST to both commodities and services. The other
alternative studied was whether the Central GST would be on products and services but
state GST would be just on goods because the state's ability to collect GST on services is
difficult to ascertain. This option also recommended a single return with both CGST and
SGST details, as well as PAN-based registration. The writers have also discussed the
constitutional amendments required if GST is ever implemented, as taxing both
commodities and services with a single tax is impossible without the amendment. The
article also addresses concerns with the credit mechanism in the CGST/SGST paradigm,
which is difficult to execute in terms of determining where a service is taxable. Other
hurdles to GST implementation in India include the availability of a solid IT network,
infrastructure, and programmers, as well as agreement on other aspects like as the basic
threshold, exemptions for goods and services, rates to be applied, and so on.

G. Garg examined the impact of GST on the Indian tax environment. He attempted to
illustrate the aims of the proposed GST strategy, as well as the potential obstacles and
opportunities that GST presents. He concluded that GST represents the most logical step
towards comprehensive indirect tax reform in our country since independence. GST is

48
levied on all supplies of goods and services, as well as their combinations. GST will affect
all sectors of the economy, including industry, businesses, government departments, and
the service sector

GST would immediately affect all sectors of the economy, including large, medium, and
small businesses, intermediaries, importers, exporters, merchants, professionals, and
consumers. One of India's most significant tax reforms, the Goods and Services Tax (GST),
is poised to integrate state economies and enhance overall GDP. GST will establish a
single, unified Indian market, strengthening the economy. Experts believe that GST will
improve tax collections and boost India's economic development by removing tax barriers
between states and integrating India through a unified tax rate. Under GST, the tax burden
will be split evenly between manufacturing and services, with a lower tax rate achieved by
broadening the tax base and reducing exemptions.

Pacific Business Review International Vineet Chouhan, Pushpkant Shakdwipee, and

Shagufta Khan published "Measuring Awareness about Implementation of GST: A
Survey of Small Business Owners in Rajasthan" in Volume 9, Issue 8, February 2017.
According to the paper's objectives, the level of GST awareness among small business
owners in Rajasthan state was discovered, and the major areas to be focused on were
training and computer software availability. Most respondents predicted that concerns such
as clients/customers refusing to pay GST and having difficulty submitting reports to the
Authority would rise. Small business owners are also more interested in creating and
participating in training than in resolving complaints through consumer protection laws.

The Finance Minister, Mr. Arun Jaitley

While lowering the GST rate on hotels, it was stated that because the hotels did not pass
on the ITC benefit to customers, they would not be entitled to claim it themselves. The
decision not to provide input tax credit to hoteliers sparked widespread outrage, with
hoteliers claiming that the whole concept of input tax credit is key to GST, which is to
prevent tax cascading. The most recent GST council's decision to levy tax Hoteliers
responded well to the focus on the transaction value of hotel rooms rather than the
announced tariff.

49
Dr. R. Vasanthagopal (2011).
The impact of GST on agriculture, producing businesses, MSME, employment, factors of
production, price level, housing, Exim trade, poverty reduction, GDP, and government
revenue was discussed, and it was concluded that the transition to a seamless GST from
India's current difficult indirect tax system would be a positive step in the booming Indian
economy. GST's success could lead to its acceptance by more than 130 countries
throughout the world, as well as a new most popular type of indirect tax system in Asia

Rashid et al., (2014) In this paper, the authors investigate the impact of GST in Malaysia,
as it is intended to be implemented in 2015. The GST is being implemented primarily to
enhance tax collections for the government and reduce the deficit. The authors investigated
the impact of the GST implementation and its relationship to specific variables such as the
consumer price index and the structural balance. The relationship between these elements
and GST is investigated for Singapore, Thailand, and Indonesia, so that when GST is
implemented in Malaysia, the administration can follow best practices. The study suggests
transparency in adopting GST and a review of the GST rates/base every 5 years, including
rectification based on the 5-year experience

In his research article, Saravanan Venkadasalam(2014) examined the post-effect of the

goods and services tax (GST) on national growth in ASEAN states using the Least Squares
Dummy Variable Model (LSDVM). He added that seven of the 10 ASEAN nations had
already implemented the GST. He also proposed that household final consumption
expenditure and general government consumption expenditure are positively and strongly
related to the gross domestic product, which supports economic theories. However, the
post-GST effect varies per country.

Dani,S.(2016) indicated in her research paper that GST, which is a system that replaces all
indirect taxes, may impede the country's progress because the attempt to apply it is not
being done wholeheartedly.
Shefalidani (2016) mentioned the influence of GST on the Indian economy in a study in
which some benefits of GST, such as one nation, one tax, no cascading effect, increased

50
consumption owing to cascading effect, transparency, and GDP growth, are explored.
Petroleum items, real estate, and spirits are exempt from GST

Kumar,R. (2016) distinguished the GST framework from the previous taxation system in
his article 'Comparison between Goods and Services Tax and Current Taxation System a
Brief Study' and underlined the impact of GST on the Indian economy.

Khurana, A. And Sharma, (2015), in their paper 'Goods and Services Tax in India - A
Positive Reform for Indirect Tax' highlighted the objectives of GST and reforms in indirect
taxation system in India. And conclude after implementation of GST, manufacturer,
wholesaler and retailer can be easily recovered input taxes in form of tax credit.
Khurana and Sharma, (2016) did a study to analyze the different benefits and prospects
of GST by shedding light on its background, the aims of the proposed GST plan, and its
influence on the Indian tax environment. They concluded that GST implementation will
undoubtedly benefit producers and consumers, while it will necessitate concerted efforts
from all stakeholders, particularly the central and state governments.

Munde and Chavan (2016) did a study to analyses the advantages and disadvantages of
GST and give recommendations to reduce loopholes and improve its effectiveness. They
concluded that if the potential loopholes are effectively addressed, tax payers will accept
the changes, and if GST procedures prove to be simple and ensure the involvement of all
stakeholders, it will undoubtedly lead to economic development and price rationalization.

Sehrawat and Dhanda(2015) conducted a study that focused on the benefits and
challenges of GST implementation in India. They decided that the Indian economy need a
simpler and more transparent tax system. They highlighted the multiple benefits of GST,
stating that it will give India with a world-class tax structure and a seamless tax system, but
its efficiency will be determined by its implementation.

Shaik et al. (2015) examined the concept and impact of GST on the Indian economy. The
study also examined various characteristics of GST models. This study also examined the
benefits and operation of GST. The study concluded that GST in the Indian context will

51
result in commercial gains that were not available under the VAT system, hence promoting
economic development.

Lourdunathan and Xavier (2016) investigated the implicit attitudes of manufacturers,

merchants, and society. It also included GST difficulties and prospects for the future in
India. This study also discusses taxation at the central and state levels. Various states are
shown in which GST is used to grow the economy. Some of the major obstacles in the route
of GST include demonetisation, inconvenient timing, political issues, rates for
manufacturers and traders, the impact on working and cash flow, and implementation in
unorganised sectors.
Lourdunathan and Xavier, (2017) used an exploratory research technique based on
previous literature to explore the attitudes of manufacturers, merchants, society, and others
regarding the GST, as well as the obstacles and prospects of implementing GST in India.
They determined that GST, without a doubt, is consistent with the one tax, one nation
tagline and will benefit both producers and consumers. Its efficient execution will result in
resource and income gains. They also stated that the government must educate, train, and
organise GST workshops in order to ensure flawless credit and return processing without
human interaction.

B, MitraPriya, (2017) described GST as a game changer in the Indian economy. The paper
demonstrated that GST lowered the complexity of numerous taxes and removed the
cascade effect. Tax structure depicted on paper, with several tax rates incorporated.
Telecom, e-commerce, automobiles, real estate, finance, and consumer goods were among
the sectors that felt the impact of taxes. The impact on input tax credit indicated that cross
credit utilisation will be available in both CGST and SGST.

Abda, S. (2017) focused his study paper on the objectives, purpose, and benefits of GST
to our economy and how it will help to strengthen it.

In their paper, Nayyar, A. and Singh, I. (2017) stated that the implementation of GST is
a significant step forward for the Indian economy. It will contribute to the revamping of
India's tax structure by making it more transparent and devoid of corruption.

52
In their research article, Kawle, S.P and Aher, L.Y 24 (2017) discussed how GST works
in India and its impact on the Indian economy.

According to Nishitha Guptha, (2017), the implementation of GST in the Indian

framework will result in commercial gains that the VAT system did not provide, as well as
economic development.

Nath,B.(2017), in his paper on 'Goods and Services Tax: A Mile Stone in Indian Economy'
evaluated the advantages and impact of GST on the Indian economy and concluded that
GST has a favorable impact on many sectors and industries.

Mujalde, S., and Vani, (2017), in their research paper on 'Goods and Services Tax (GST)
and its outcomes in India', focused on the features of GST, the influence of GST on the
Indian economy, and the potential benefits and drawbacks of GST.

Kapoor Kapil, (2017) investigated GST implementation, models, mechanisms,

difficulties, and obstacles. This article investigates the development stages of GST in India.
This document includes GST exclusions such as petrol, alcohol, and diesel, as well as
benefits such as simplicity, transparency, cascading effect, reduced tax burden, tax revenue
collection, economic growth, and no tax for exporters. The study also addresses challenges.
The research concluded that proper GST implementation will result in economic growth.

In their study paper, Yadav,S.S and Shankar, R. (2018) examined the history and
evolution of GST in the country, as well as how it has replaced numerous indirect taxes. In
her study article, Rupa, R. (2017), discussed the GST concept. She also discussed the
positives and downsides of GST in our economy.

Bar hate (2017) discovered that consumers had no doubts about the projected benefits of
GST, regardless of their business kind or legal status, because they are upset by the current
system, which looks to be onerous. The majority of respondents feel that GST will benefit
their businesses financially and that tax compliance expenses will not increase much.
Surprisingly, respondents expect expenditure on tax compliance to decrease if GST is

53
imposed. The lack of knowledge, along with apathy towards reforms, may stymie the rapid
implementation of this system, particularly in small towns where no orientation
programmes have yet been organized and carried out by competent authorities.

Shakwipee (2017). A survey conducted to determine the level of GST awareness among
small business owners in Rajasthan State discovered that the primary areas to be addressed
are training errors and computer software availability
According to Ahamd et al. (2016), the degree of GST awareness is yet to be adequate.
This is because the survey only asked general questions that the respondents, as end users,
should be familiar with. As a result, respondents had a predominantly negative assessment
of the impact of GST adoption. Respondents received less information and promotion from
the government. The majority of respondents were unsure whether the products and services
were not subject to GST. Furthermore, due to a lack of awareness about GST, respondents
had a negative view. As a result, the government must convince that GST would not have
a long-term impact on the public, notably convincing end users that there will be no increase
in the prices of goods and services.

In his research article, Venkadasalam (2014) used the Least Squares Dummy Variable
Model (LSDVM) to examine the post-effect of the goods and services tax (GST) on
national growth in ASEAN states. He added that seven of the 10 ASEAN nations had
already implemented the GST. He also proposed that household final consumption
expenditure and general government consumption expenditure are positively and strongly
related to the gross domestic product, which supports economic theories. However, the
post-GST effect varies per country.

Boonyarat et al. (2014) employed Structure Equation Modelling (SEM) to investigate the
links between tax awareness and tax knowledge, and they discovered that tax knowledge
has a positive relationship with tax awareness. As a result, taxpayers will be more aware of
the tax system if they are familiar with and understand it.

Agogo Mawuli (May 2014) investigated "Goods and Service Tax an Appraisal" and
discovered that GST is not beneficial to low-income nations and does not bring broad-

54
based growth to impoverished countries. If countries still wish to apply GST, the rate
should be less than 10% to promote growth.

Pinki, Supriya Kamma, and Richa Verma (July 2014) investigated "Goods and Service
Tax" as a panacea for India's indirect tax system and concluded that the new NDA
government in India is supportive of GST implementation, which will benefit the central
government, state governments, and consumers in the long run if it is supported by strong
IT infrastructure.

Djawadi and Fahr, (2013) This study emphasizes the importance of tax awareness in
increasing the thrust of authorities and citizens. The researcher utilized structural equation
modelling to investigate the links between tax awareness and tax knowledge, and he
discovered that tax knowledge has a positive relationship with tax awareness. As a result,
taxpayers will be more aware of the tax system if they are familiar with and understand it.

According to Tan and Chin-Fat (2000), Malaysian comprehension of GST remained low.
According to a study conducted by Djawadi and Fahr (2013), understanding of taxes is
vital for increasing the thrust of authorities as well as citizens.

According to Tulu (2007), other characteristics such as taxpayers' attitude or morale,

which were discovered to be the result of a lack of awareness, had minimal impact on
taxpayers' attitude towards taxation. Many persons or taxpayers may want to fully comply
with the tax systems, but are unable to do so due to a lack of awareness and comprehension
of their complete obligations. Even if they understand their obligations, they may be unsure
how to comply due to the lack of two-way communication between authorities and
taxpayers. Dup (2014) suggested that taxpayers' ability to comply with tax laws is strongly
related to tax awareness.

Ehtisham Ahmed and Satya Poddar (2009) investigated "Goods and service tax reforms
and intergovernmental consideration in India" and discovered that the introduction of GST
will result in a more transparent tax structure, as well as an improvement in output and

55
productivity in the Indian economy. However, the benefits of GST are heavily dependent
on the sensible design of GST.

Pall et al. (2013) used multiple regression analysis to discover a strong association between
awareness and tax knowledge. Individuals who are knowledgeable about tax systems are
more likely to appreciate them, which increases their awareness. Furthermore, Jatmiko
(2006) concludes that awareness can be developed through knowledge and comprehension.
The conclusions of Palil et al. (2013) and Jatmiko are corroborated by Tayib's (1998) study.
Individuals' awareness of the tax system has been shown to rise when they are
knowledgeable about the tax. This establishes a major association between tax knowledge
and tax awareness, and when individuals or taxpayers are knowledgeable about it, it is
easier for them to study and obey the tax rules.

According to Mustapha and Palil (2011), several studies have demonstrated the influence
of compliance behavior on individual awareness. According to the findings of Razak and
Adafula (2013) and Santi (2012), taxpayer knowledge is highly associated with tax
compliance, which is corroborated by the study Jatmiko (2006).

According to Torgler (2011), tax morale is vital for taxpayer awareness. Tekeli's (2011)
study, which used multiple regression analysis, found that tax morale has no significant
link with tax awareness. Tekeli's (2011) conclusion is confirmed by a study on the causes
and repercussions of tax morale.

Saira et al. (2010) Based on the history of GST implementation in other countries
throughout the world, most countries saw a beneficial impact in terms of revenue; yet,
despite the success of GST implementation, Malaysian citizens remain uncertain about the
GST (Saira et al., 2010). The study's findings revealed that the majority of Malaysians are
not satisfied with the GST system.

56
According to Palil et al. (2010), inadequate public awareness of GST may occur due
reasons
Lack of knowledge with the system was a major issue during the early years of GST
implementation. There are various concerns that have hindered customers from adopting
GST implementation in Malaysia, the most prominent of which is a fear of price increases
and subsequent inflation
Sagar Shah's 7 (2012) essay "Service Tax on Hotel Industry" examined how taxation of
food supply services in the hotel industry has always been a sensitive subject, whether under
VAT or service tax. Furthermore, providing hotel services has been a problematic subject
under the Luxury tax, and we now have an overlapping tax in the form of service tax. In
terms of service tax, the hotel business has been subject to it for a long time, specifically
for banqueting and related catering services. Slowly and methodically, the services of air-
conditioned restaurants serving spirits were brought to tax, as well as housing services in a
hotel when the announced room cost exceeds Rs 1000 per day.

CA Vinod Chaurasia (2017) "GST on Hotel Industry" detailed the various GST rates
applicable to hotels as well as the availability of input tax. It was discovered that under the
GST framework, the tourism and hospitality industries will find it easier to seek and obtain
input tax credit administratively. Also discusses the advantages and disadvantages of GST
in the hotel industry.

Mukesh Butani and Tarun Jain (2018) "The Myth of an Ideal Single Rate-GST" argued
that merging tax slabs bodes good for Make-in-India. This is mostly due to a drop in overall
tax incidence, simplification of the tax regime, and the elimination of state bias, with some
items attracting 5%, 12%, or 18%, respectively. This positive repercussion can be reserved
for domestic supplies by making necessary revisions to customs duties.

Akshay Rakhunde and Dr. Priti Rai (2019) investigated the impact of GST on the hotel
industry in Nagpur. The study selected three, four, and five-star hotels in Nagpur. The study
discovered that GST improves financial management and reduces problems for the hotel
community, resulting in cost increases and free flow of negotiations. The study revealed
that the majority of hoteliers in Nagpur support GST.

57
Panwar, D., and Patra, S. (2019) examine the impact of goods and services tariffs on the
restaurant and food service trade in India. The study is exploratory in nature, with a focus
on secondary data analysis from newspapers, magazines, and various websites that have
published and focused on various determinants of Goods and Service Tariffs and how they
influence restaurant bills and marketing factors of these companies/businesses. The survey
indicated that, with the upcoming changes in tax structure, the GST will largely affect the
promotional strategy of restaurants and food service sectors, as well as provide consumers
with a clear picture of the taxes they pay at restaurants. Therefore, restaurants and food
service enterprises must construct an outline of the future in order to evaluate GST and its
influence on their operations and functions are required.

Aswathy Krishna and Divya. M.S., Aashish C.I. (2018) evaluated the impact of GST on
the hotel business. According to the survey, inexpensive hotels benefit the most from the
application of GST. It was also discovered that hotels falling inside the 18-28% GST slab
suffer the negative consequences of GST. The study concluded that GST solves the
challenges faced by the hotel industry, resulting in cost optimization and free flow of
transactions.

Japee and Lakhani (2018) researched the Goods and Services Tax in India: A Paradigm
Shift in Taxation. This paper examines the impact of GST from an international
perspective. The researcher discussed prior and post GST tax classifications, as well as the
significance and need for GST in India. This report also illustrates the trajectory of GST,
from its inception in 2017 to its impact on famous sectors of the economy. Finally, the
researchers believe that this tax structure will benefit both customers and businesses if the
entire country works together to ensure its success.

Saeeda (2019) investigated the impact of GST on many aspects of the restaurant and hotel
businesses in Anand and Nadiad districts. The primary goal of this research is to investigate
the influence of GST on several aspects of Restaurant operations in Anand and Nadiad
City. The researcher used the Convenience Sampling technique to identify 35 hotels and
restaurants in Anand and 33 in Nadiad for the study. The study is based on primary data
acquired through a structured questionnaire. For hypothesis testing, the researcher

58
employed Pearson Correlation, the T-test, and the independent sample test. The researcher
determined that the effect of GST on hotel and restaurant sales and purchases is favorable
to neutral, however profits stay consistent even after GST introduction. The researcher also
noted that accounting procedures and record keeping get easier, while production and
service costs remain constant.

Subha and Premkumar (2020) conducted an empirical study on the impact of GST on the
hotel industry in Chennai city. The purpose of this study is to determine the impact of GST
on the hotel industry in Chennai using five independent variables to identify respondents'
opinions on GST implementation, specifically whether GST is effective, easy to
understand, taxation condition, profit margin, and customer increase after GST. The
researchers used a structured interview strategy to obtain data from 50 hotels for their study.
The researchers used a disproportionate stratified random sampling procedure. The
researchers analyzed the data using descriptive statistics and multiple regression analysis.
Researchers investigated the advantages and downsides of GST in relation to the hotel
industry, as well as the positive or negative influence. GST on the hotel industry in Chennai
city. Finally, the study stated that GST in the hotel industry will encourage more people to
use hotel services while also increasing government revenues.

Jonathan and Gabriel (2017) examined the Impact of GST in hotel and restaurants. This
study focuses on impact analysis on the restaurant and food industry. Researchers classified
the restaurants on the basis of the food and services they provide respectively. And
accordingly, researchers examined the before and after GST scenario. Researchers
explained how the restaurant bill will look under GST and what will be the implications
for the end customers, the owners and the overall industry. So finally, researchers
concluded that companies specializing in food and beverages operations could be the
biggest beneficiaries of GST within the hospitality sector. They further added that food and
beverages bills have multiple components and can inflate the bills by 30-35% and a single
slab tax will benefit consumers and should lead to savings of 10-15% on the overall bill.

Abraham and Mathew (2019) conducted a study on the impact of GST reform on Kerala
hotels. The study's primary goal is to investigate hoteliers' attitudes about GST

59
implementation. For the study, a questionnaire was prepared and distributed to 60 hotels
and restaurants in the Kottayam region using the convenience sampling technique. The
researchers analyzed the data using percentages and the chi square test. Furthermore,
researchers focused on identifying the issues that hoteliers faced when implementing GST.
This study also examines whether the application of GST increases compliance costs.
Finally, studies concluded that the majority of hoteliers have shown faith in the system,
despite the fact that
Despite the fact that the majority of hotels have suffered higher expenditures in adapting to
the new system, they believe that GST will be advantageous in the long run.

Aswathy et al. (2018) conducted a study on GST and its effects on the hotel business. This
study seeks to determine the impact of GST on the hotel business. Researchers grouped
GST rates by room rent and then studied the impact of GST based on the rates. This study
examines the impact of GST on the hotel sector in terms of reduced tax rates, centralized
registration, the provision of GST audits, the documentation of hotel and restaurant
discount and offer policies, the effect of inward and outward receipts, the lack of input tax
credit on alcohol and electricity because they are not subject to GST, and so on Finally,
experts determined that companies that focus on food and beverages may be the biggest
benefactors of GST in the hospitality sector, but hotels lying under the 1828% GST slab
endure the negative effects of GST. Researchers also advised lowering average lodging
rates, which would benefit both hoteliers and guests.

Diksha Panwar and Sidheswar Patra (2017) examined the impact of GST on the
restaurant and food administration industries in India. The goal of the study was to uncover
execution experiences and highlight the negative effects of cafés and the food sector. The
analysis assumes that the constant change in charge rates and the ineffective tax collection
method discourage new café competitors.

Dr. Kala Ganeshan and Deepa (2017) presented a contextual analysis on GST in the
administration sector, with a special emphasis on the hotel industry. The purpose of the
inquiry was to look into the effects of GST on Chidambaram vials extravagant resort. The
research concludes on a positive note, stating that it is a straightforward and standard

60
evaluation across the country, which might reduce tax dodging and make payments more
serious, perhaps bringing in more revenue for the government.

Shana and Rohit Bhat (2018) investigated the effects of GST on the lodging business in
Mysore. The investigation's goal was to examine buyer attitudes towards GST based on
population size, and the examination was based on test research. The study discovers and
explains that the age group of up to 30 years old in the area had a poorer understanding of
the framework than the older age groups. Few clients have difficulty paying extravagant
charges. The implementation of GST reduced the collection of several levies at each stage
of company flow and was viewed as a single assessment.

Bharati Sharma et al. (2018) read a significant tax assessment methodology for the café
business, comparing VAT with GST and analyzing the impact on buyers and restaurant
owners. The study assumes that GST is a critical foundation for both restaurant owners and
customers, increasing the essential share of buyers by lowering the tax rate. It will have a
direct impact on entrepreneur productivity because lower costs will attract more customers
and boost the market development of the café business as well as the GDP of the Indian
economy.

. FOREIGN REVIEW.

The research report (S. Thowseaf, 2016) examined the benefits of Goods and Services
Tax on the economy, business, industry, and consumers, as well as the GST implementation
plan in India. If GST is properly implemented, with tax exemptions for certain goods such
as agricultural commodities, it will increase revenue at the Centre as the tax collection
system becomes more transparent, reducing tax avoidance and leading to economic growth,
assisting Indians in regaining wealth lost within the country.

Pena, (2010) Mexico in 2001 Instead of subsidising the masses, it was proposed to impose
a flat 15% VAT rate on some commodities such as food and other basic necessities. The
author used the General Equilibrium Model to examine the impact of the proposed
introduction of a flat Value Added Tax rate and concludes that it is preferable to impose

61
such a flat rate on basic items that generate income, with a portion of this income being
used for the benefit of the masses rather than subsidising them.

The writers examine. In Bikas (2013), the authors investigated the VAT rate and the EU
economy, as well as the relationship between the VAT and macroeconomic variables and
their impact on the VAT rate. The authors conclude that there is a positive relationship
between macroeconomic indices such as GDP, per capita income and consumption, imports
and exports, and the relevant VAT rate.

62
 CHAPTER NO: 04(Data Analysis, Interpretation and presentation)

Organization: Data Analysis, Interpretation and Presentation

1.Is this your first business related to restaurant sector?
(a) Yes
(b) No
Table no:1(Restaurant sector)
Particulars Sample Percentage
Yes 28 71.8%
No 11 28.2%

Graph no:1(Restaurant sector)

Interpretation
71.8% of the owner had the first business related to hotel sectors and rest other
28.2% had other industry.

63
2. Do you enjoy what you do at your work?
(a) Yes
(b) No
(c) Maybe
Table no:2(Enjoyment)
Particular Sample Percentage
Yes 29 72.5%
No 6 15%
Maybe 5 12.5%

Graph no:2(Enjoyment)

Interpretation
72.5% of owners are enjoy their work which can they do, rest 12.5% said maybe they enjoy
their work that means they said if conditions are satisfied according to them then they enjoy
their work otherwise not and remaining 15% are not enjoy their work because of unsatisfied
targets.

64
3. Are you satisfied with GST applying in your hotel?
(a) Yes
(b) No
(c) Maybe
Table no :3(Satisfaction with GST application)
Particular Sampling Percentage
Yes 22 55%
No 9 22.5%
Maybe 9 22.5%

Graph no :3(Satisfaction with GST application)

Interpretation:
55% of the owner's satisfied with GST applying in their organization, rest 22.5% are not
satisfied with GST and remaining 22.5% said that maybe they were satisfied.

65
4. How would you rate your overall experience about GST application in your
restaurant?
(a) Highly satisfactory
(b) Satisfactory
(c) Neutral
(d) Unsatisfactory
Table no:4(Rating)
Particular Sample Percentage
Highly satisfactory 6 15%
Satisfactory 16 40%
Neutral 14 35%
Unsatisfactory 4 10%

Graph no :4(Rating)

Interpretation:
15% of the owners are highly satisfied with GST, 40% of the owners are satisfied with
GST, rest 35% are neutrally satisfied with GST and remaining 10% are not satisfied with
GST

66
5. How your hotel received benefits after GSTapplication?
(a) No
(b)Yes
(c) Maybe
Table no:5(Benefits)
Paticulars Sample Percentage
Yes 21 52.5%
No 9 22.5%
Maybe 10 25%
Graph no:5(Benefits)

Interpretation:

52.5% of owners said that their restaurant received benefit after applying GST, rest 22.5%
of restaurant said that their restaurant is not received any benefits and remaining 25% said
their restaurant may be received benefits after applying GST.

67
6. Is you have stress because of applying GST?
(a) Yes
(b) No
(c) May be

(d) Can’t say

Table no :6(Stress)
Particulars Sample Percentage
Yes 7 17.5%
No 20 50%
Maybe 8 20%
Can’t say 5 12.5%

Graph no:6(Stress)

Interpretation:17.5% of owners had stress because of applying GST, 50% of owners not
have stress because of GST, rest 20% of owners may be have stress and remaining 12.5%
can't say anything about that.

68
7. Is your organization can provide awareness to your customers about GST
application on hotel industry?
(a) Yes
(b) No

Table no :7(Customer awareness about GST application)

Particulars Sample Percentage
Yes 32 80%
No 8 20%

Graph no:7(Customer awareness about GST application)

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.

69
8. How is the relationship between you and your co-workers?
(a) Good
(b) Bad

(c) Can’t say

Table no :8 (Workplace Relationships)
Particulars Sample Percentage
Good 32 80%
Bad 2 5%
Cant ‘say 6 15%

Graph no:8(Workplace Relationship)

Interpretation:

80% of owners have good relationship with his co-workers, rest 15% can't say anything
about that.

70
9. Has your customers replied positively about GST application?
(a) Yes
(b) No
(c) Maybe

(d) Can’t say

Table no :9(Customer Feedback)
Particulars Sampling Percentage
Yes 19 47.5%
No 7 17.5%
Maybe 6 15%
Cant ‘say 8 20%

Graph no :9(Customer feedback)

Interpretation:

47.5% of the owners said their customers positively replied on GST application, 17.5% of
owners said their customers are not positively replied on GST and rest 15% said that may
be their customers replied positively on GST application in their firm.

71
10. Is application of GST positively influence on your restaurant’s performance in
the market?
(a) Agree
(b) Disagree
(c) Neutral
Table no:10 (Impact of GST on restaurant performance)
Particulars Sampling Percentage
Agree 25 62.5%
Disagree 4 10%
Neutral 11 27.5%

Graph no:10(Impact of GST on restaurant performance)

Interpretation:

62.5% of the owners said that GST is positively influence on their restaurant's performance
in the market, rest 10 % said GST is not positively influence on their restaurant's
performance and remaining 27.5% said may be GST positively influence on their
restaurant's performance.

72
11. Is your working environment is a safe because of applying GST?
(a) Yes
(b) No
(c) Maybe

(d) Can’t say

Table no :11(Safety because of applying GST)
Particulars Sampling Percentage
Yes 27 67.5%
No 4 10%
Maybe 7 17.5%
Cant ‘say 2 5%

Graph no :11(safety because of applying GST)

Interpretation:
There are 67.5% of the owners said that their working conditions are safe because of
applying GST, rest 17.5% of owners said may be their conditions are safe and remaining
5% of owners can't say anything about that.

73
12. How would GST impact the restaurant selling alcoholic beverages?
(a) Good
(b) Bad

(c) Can’t say

Table no :12(Impact on alcohol sector)
Particulars Sampling Percentage
Good 20 50%
Bad 7 17.5%
Can’t ‘say 13 32.5%

Graph no :12(Impact on alcohol sector)

Interpretation:
There are 50% of the owners said that GST impact good for selling alcohol beverage and
17.5% said its Bad impact of selling alcohol beverage 32.5% of owners can't say anything
about that.

74
13. Is there any difference between facilities provided before and after GST?
(a) Yes
(b) No
(c) Maybe
Table no :13(Difference)
Particulars Sample Percentage

Yes 22 55%
No 6 15%
Maybe 12 30%

Graph no :13(Difference)

Interpretation
22% of respondents reported a difference in facilities before and after GST.

15% reported no difference.

12% were unsure.

75
14. What is overall perception about hotel and restaurant?
(a) Positive
(b) Negative
Table no :14(Perceptions)
Particular Sample Percentage
Positive 35 87.5%
Negative 5 12,5%

Graph no :14(perceptions)

Interpretation

Positive Perception: 35 out of 40 respondents have a positive perception, which is 87.5%

of the total sample. Negative Perception: 5 out of 40 respondents have a negative
perception, which is 12.5% of the total sample.

76
15. how has the implementation of GST affected the pricing of food and beverages in
hotel restaurants?

The majority of fresh and frozen foodstuffs, such as meat, vegetables, and fruits, are
exempt from GST. Other GST rates apply only to food items packaged with a brand
name. The GST rate on food products and services is currently limited to 18%, with
no food products falling into the 28% maximum tax category. As a result, there have
been no obvious price increases or decreases in food products since the
implementation of GST (Goods and Services Tax). Under GST, restaurants fall under
the 5% GST rate, with no option to claim input tax credit (ITC) or the 18% GST rate,
with ITC claims. We get fair n fix price from our customers. Input tax credit in relation
to supply of food and beverages is restrict Restaurants are subject to either a 5% GST
rate under the GST with no possibility to seek input tax credits (ITCs) or an 18% GST
rate with claims for ITCs. The position of the establishment will determine this rate.
Input tax credits in relation to supply of food and beverages and outdoor catering is
restricted unless output supply is also of same category of goods/services. The bill
amount increases Because of gst pricing of food and beverages are increases but
customer also satisfied for our services so they pay high price for the food. It increases
the total cost of the customer. It increases the total cost of the customer

77
16. What is your monthly income?
(a) Less than 30 thousand

(b) 30- 40 thousand

(c) Greater than 40 thousand
Table no :16(monthly Income)
Particulars Sample Percentage
Less than 30 thousand 20 51.3%
30-40 thousand 12 30.8%
Greater than 40 7 17.9%
thousand

Graph no :16(Monthly Income)

Interpretation
Positive Perception: 35 out of 40 respondents have a positive perception, which is 87.5%
of the total sample.
Negative Perception: 5 out of 40 respondents have a negative perception, which is 12.5%
of the total sample

78
17. Is your profile on any app like Swiggy or Zomato?
(a) Yes
(b) No
Table no :17(profile)
Particulars Sampling Percentage
Yes 27 67.5%
No 13 32.5%

Graph no:17 (Profile )

Interpretation
27 individuals have their profile on an app like Swiggy or Zomato, representing 67.5% of
the sample.
13 individuals do not have their profile on such apps, representing 32.5% of the sample.
This data interpretation suggests that a majority of the individuals surveyed (67.5%) have
their profile on apps like Swiggy or Zomato.

79
18. Are there any exemptions for GST on hotel rooms?
(a) Yes
(b) No
Table no :18(Exemption)
Particulars Sampling Percentage
Yes 16 41%
No 23 59%

Graph no :18 (Exemption )

Interpretation
41% of the sampled hotel rooms had exemptions for GST, while 59% did not have
exemptions. This suggests that there are indeed exemptions for GST on hotel rooms, as
indicated by the option "Yes."

80
19. Is GST applicable to room service charges in hotels?
(a) Yes
(b) No
Table no :19(applicable)

Particulars Sample Percentage

Yes 27 69.2%

No 12 30.8%

Graph no :19(applicable)

Interpretation
Total Responses: 27
Responses indicating GST is applicable to room service charges: 19 (69.2%)
Responses indicating GST is not applicable to room service charges: 8 (30.8%)
Therefore, based on the sample data, it appears that the majority (69.2%) believe GST is
applicable to room service charges in hotels.

81
20. GST is a _ _ _ _ _ based tax on consumption of goods and services.
(a) Duration

(b) Destination
(c) Dividend
Table no :20 (Tax consumption on goods and service)

Graph no:20 (Tax consumption on goods and service)

Particulars Sample Percentage
Duration 22 55%
Destination 7 17.5%
Dividend 11 27.5%

Interpretation
Duration: 22%
Destination: 55%

Dividend: 27.5%

It seems like percentages represent the distribution or allocation of GST based on certain
criteria. For example, 55% of GST is based on destination, 22% on duration, and 27.5% on
dividend.

82
CHAPTER NO: 5 CONCLUSION, SUGGESTION AND FINDING

CONCLUSION:
After completing research on the impact of GST on the hotel business, it was determined
that the null hypothesis (H1}) will be rejected and the main hypothesis (Ho) will be proven
correct.

Companies that focus on food and beverages may be the biggest benefactors of GST in the
hotel sector. This benefits customers while also resulting in savings. After the
implementation of GST, it was discovered that inexpensive hotels benefit the most. The
hotels that come under the 18-28% GST slab suffer the consequences of GST.
The solution is to cut the "ARR-Average Room Rates". Travellers seek choose budget
hotels since they provide less expensive accommodations. GST includes a consistent tax
framework; thus, each state has its own tax. Previously, the restaurant industry was subject
to several taxes. The tax duality has been abolished. It also helps to improve financial
management. Hopefully, GST will solve the challenges experienced by the hotel industry,
resulting in cost savings and free flow of transactions

We have to study after the study of this topic we have to conclude that the GST is more
beneficial to the everyone industries. After the GST tax system in India are changed and
applicable the only one tax. GST is very easy process in now a day most of the owners are
have to handle by own. It is a very easy process in filing of a return and as well change of
any information like addresses, principles etc.

Due to GST billing system are very easy and customer are satisfied with the original bill.
Customer have shown the original bill with taxes applicable on the food and they are
satisfied with that. After the GST hotel industry have much more developed and customers
are trusted on this hotel.
With the help of the above study, it is possible to conclude that GST has both a good and
negative impact. I visited different hotels and received a variety of replies. different of them
stated that before to GST, our hotel businesses were burdened with multiple taxes. The tax
duality has been abolished. It also contributes to better financial management. As a result,

83
GST has eliminated the issues that our hotel industry was facing. Some of them also stated
that the imposition of a service tax on room charges, which will be passed on to end
customers, is likely to have a negative impact on demand because it raises effective
consumer costs. So, I summarized the questionnaire in a pie chart to determine how many
respondents supported and opposed GST. Many people believe that the application of GST
benefits customers and improves footfall. The overall impact of GST on the hotel business
will be good in the long run. The Indian government has taken a significant step forward
with GST. The hotel industry currently faces several tax regimes and is a victim of tax over
taxation. GST will help to lower several taxes, providing a considerable boost to the hotel
industry. The composition restaurant supplies will not be eligible for the input tax credit.
Finally, we can claim that the hotel sector has always been a priority for the government.
This industry surely contributes to the nation's development and will continue to Beyond
the frontiers. In this section, we will end and summarize the impact of GST on the hotel
industry.

Customers and restaurant proprietors alike would be pleased with the GST regime.
Customers may be pleased with the reduction in the number of payments they will make
presently in order to satisfy their taste buds. On the other hand, hotel and restaurant
operators can rejoice since they can now easily collect input tax credits. However, hotels
with room tariffs per night surpassing Rs. 7500 would undoubtedly feel the impact of GST,
as they may experience a decrease in the number of visitors visiting their property, since
they will be required to pay the GST at 28%, which they believe is excessive.

The restaurant industry has been plagued with hefty and various taxes. However, booze
should be included in the GST. Exempting it undermines the fundamental aim of
implementing a unified single tax structure. This allows governments to levy their own
taxes without a cap and with distinct accounting standards, potentially resulting in double
compliance for the restaurant/hotel industry. This is neither good to 'ease of doing business'
nor to customers. "Everybody favors tax consolidation because it increases transparency
and helps guests and buyers comprehend the whole expenses. Overall, GST should benefit
the sector, given that the several levies in food and beverages

84
The Indian system of taxation on goods and services is distinguished by cascading,
distortionary taxes on output, which leads to resource misallocation, reduced productivity,
and slower economic growth. To overcome this barrier, the government requires a pure and
straightforward tax system such as GST (Goods and Services Tax). For the GST system to
function smoothly and effectively, all state governments must work together and support
its implementation in India

Companies that specialize in food and beverage operations should benefit the most from
GST in the hotel sector. Food and beverage bills contain several components and can
increase by 30-35%. A single-slab tax will benefit customers and should result in savings
of 10-15% on their total price.

The restaurant industry has been plagued with hefty and various taxes. However, booze
should be included in the GST. Exempting it undermines the fundamental aim of
implementing a unified single tax structure. This allows governments to levy their own
taxes with no cap and distinct accounting rules, resulting in double compliance for the
restaurant and hotel industries. This is neither good to 'ease of doing business' nor to
customers.

"Consolidating taxes benefits everyone since it increases transparency and helps guests and
buyers comprehend overall prices. "We welcome the development," said Raj Rana, CEO
of hotel group Carlson Rezidor's South Asia division. "Some states have a luxury tax, which
affects accommodation rates. If India wants to be competitive, it must also have
competitive tax arrangements.
"Luxury and other service taxes in hospitality total more than 22%, compared to the
proposed 18% under the GST regime." Overall, GST should benefit the sector, given that
the several levies in food and beverages are eliminated.

The gaps in India's current indirect tax’s structure necessitate a big breakthrough in this
field to make doing business easier and more efficient. Hopefully, GST will be the apex of
an effective and harmonized consumption or destination-based tax system, resolving the
sector's difficulties and allowing for cost minimization and free flow of transactions.

It may be said that the implementation of GST is a significant move taken by the
Government of India.

85
The hospitality sector is a varied field that includes hotel and leisure services, accountancy,
and cuisine and beverage, event management, and most importantly, guest pleasure.

This industry currently faces several tax regimes and is a victim of tax over taxation. GST
would help to lower several taxes, providing a considerable boost to the hospitality industry

The hotel's room VAT rate ranges from 8.4% to 14.5%, with an additional 10% Luxury
Tax and 2.5% Service Tax. The effect of GST will be good, resulting in a significant
reduction in taxes of 12% and 18%, respectively.

The method for all invoices/receipts for inside and outward supply will become laborious
because each one must be uploaded into the system.

Profit, food prices, and room rents in the Mumbai hotel industry have all grown after the
implementation of GST.

The quality of hotel services has decreased after the implementation of GST. Additionally,
hotel visits have decreased. Customers received the benefits of the Input Tax Credit
following the establishment of GST.

The majority of hotels in the Mumbai region are registered under the GST Act. vii. Since
the adoption of GST, the Mumbai hotel industry has grown.

GST Act is better than VAT and Service Tax. Rent of hotel rooms had been gone down in
covid-19 pandemic Hotels in Mumbai Region are calming Input tax credit under GST law
Mumbai hotel industry had been affected due to GST implementations and Pandemic
Covid 19.

According to Section 10 (1) (b) of the CGST/SGST Act, services provided by holes with
restaurants whose aggregate sales in the preceding fiscal year does not exceed 50 lakhs
shall pay 2.5% as CGST and 2.5% as SGST, totaling 5% under the composition system.
The composition restaurant suppliers will not be eligible for the input tax credit. Finally,
we can claim that the government has always prioritized the hotel sector. The hotel
business, including tourism, accounts for 6.23% of national GDP and 8.78% of total
employment in the country. This industry contributes significantly to national development
and is expanding outside its limits.

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We have to study about GST impact on hotel industry after all the above information it is
showed that the (H1) null hypothesis is to be rejected & (H0) is to be accepted after
conducting the research on the study of impact of GST on hotel industry. Many enterprises
that focus on food and beverages may benefit the most from GST in the hotel sector.
Following the imposition of GST, they will benefit both consumers and savers. The
installation of GST has greatly benefitted the hotel's budget. Generally, the hotel sector
follows the rate of 18%. to 28%. We have to study after the study of this topic we have to
conclude that the GST is more beneficial to the everyone industries. After the GST tax
system in India are changed and applicable the only one tax. GST is very easy process in
now a day most of the owners are have to handle by own. It is a very easy process in filing
of a return and as well change of any information like addresses, principles etc. Due to GST
billing system are very easy and customer are satisfied with the original bill. Customer have
shown the original bill with taxes applicable on the food and they are satisfied with that.
After the GST hotel industry have much more developed and customers are trusted on this
hotel.

SUGGESTIONS:

Customer-slab rate policies must be implemented by the Indian government in order to

reduce income disparities between the low middle-class and low-income groups.
Hotels with non-air-conditioned rooms must set a moderate GST rate to meet the income
demands of the low-middle and low-income individuals.
Allowances for GST rates in small and moderate hotels promote low- and middle-income
people.
In terms of GST in hotels, alcoholic products such as liquor should be taxed at the highest
slab rate, as opposed to the present 18% GST rate for air-conditioned restaurants.
Reducing the cost of food and beverages encourages those with low and intermediate
incomes.
We have to conducted survey on impact of GST on hotel industry after that we have to
analyses the whole scenario and give some suggestion about that. Points are below
mention:

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1. Because many hotels are based on A/C and Non-A/C, we recommend that both
rates be fixed at a modest rate of GST for both A/C and Non-A/C, which will benefit
low-income individuals
2. Many hotels sell alcoholic beverages, such as liquor and wine. So, the rate of this
product is significantly higher than the other products. As a result, we must
advocate for lowering the tax on alcoholic beverages.
3. We have to advise that the rate of food and beverages be reduced such that it is
advantageous for both the middle class and lower income group.
4. Allowances for GST rates in small and moderate hotels to encourage low-income
and middle-class customers.
5. GST rates on food and rooms should be minimized to raise revenue and profit of
the hotel industry.
6. Compositions scheme threshold limit should be enhanced so that hotel can avail
benefit of composition scheme.
7. Benefit of Input tax credit must be passed to customers; hence GST council must
make stringent provisions.
8. Special Package should be announced for hotel industry for at least three years to
cover the loss incurred by industry during covid-19 period.
9. Loans must be provided by financial institutions including nationalized banks at
lower rate of interest to hotel industry for at least three years to cover losses incurred
by industry during covid-19 pandemic.
10. Hotel industry should also concentrate more on cost cutting, they should not spend
unnecessary expenditure on decoration of hotels.
11. . Hotels industry should also help each other by forming associations of hotels and
groups at district level, state level and national level.
12. Fixed expenditure such as salaries, Telephone, Electricity, office expenses should
be reduced by hotels to survive in the difficult times of covid-19 pandemic.
13. Variable expenses should also be controlled on vegetables, fruits, beverages,
groceries, pulses etc. during covid-19 pandemic.
14. Hotel Industry should also charge competitive prices or work at Break Even Point
to survive during the covid 19 pandemic period.

88
15. Working hours of staff should be increased and they should be requested to provide
quality services in order to survive in the difficult times of covid 19.

As the hotels comprising of non-A/c compartments, the hotel has to fix a moderate
rate of GST as it suits the income needs of low-middle class and low-income
people. Customer-slab rate policy has taken initiative by the government of India
to cut the income level differences among the low middle-class and low-income
group.

In order to make a required amount of GST revenue to the government from the
Goods and services purchased, there is no need to collect luxury tax as the GST
rates in high and moderate restaurants are inclusive of luxury tax. Therefore, it
benefits to pay extra pay for tax by the customers as well as it restricts the tax
revenue to the government. The allowances on GST rates in small-sized and
moderate hotels as it encourages the low-income and middle-class people.

FINDING

Following were findings from the data collected from General

Public:
1. Respondents were having opinion that prices of food have gone up due to
GST.
2. Quality of food has declined due to implementation of GST according to
respondents.
3. Quality of services provided in hotels have dropped after implementation of
GST.
4. Prices of hotel rooms have been gone up due to GST implementations.
5. Benefit of Input Tax Credit (ITC) has been passed to customers.
6. Visits to hotel have down due to implementations of GST.
7. Respondents were having views that in post GST era, their orders from hotel
industry have gone down.

89
 8. Respondents’ trips and business visit have reduced in post GST era due to
high price of hotel rooms.
9. Cost of accommodations of hotel rooms has gone up due to GST, hence rent
of hotel rooms have gone up as per respondents.
10. Mumbai hotel industry has been affected due to GST implementations.
11. Respondents are ordering food from hotels in Covid 19 pandemic period
12. Respondents are visit to hotels have gone down in Covid 19 pandemic
period.
13. Prices of hotel rooms have gone down in covid 19 pandemic period
according to respondents.

Following were findings from the data collected from Professionals:

1. Profit of hotels industry has gone up in a post era
2. prices of food have gone up due to GST.
3. Quality of services provided in the hotels have dropped due to Goods and
Service Tax
4. Prices of hotel rooms have gone up after implementation of Goods and Service
Tax.
5. Benefit of Goods and Service Tax (Input Tax Credit) hotel owner are passing
to customers.
6. Visits to hotels for food have gone down after implementation of Goods and
Services Tax.
7. In Post GST era, orders for foods from hotels have reduced due to Goods and
Service Tax.
8. Cost of accommodation of hotels rooms has increased due to GST and hence
rent of hotels has gone up.
9. Goods and Service Tax rates on sale of food in hotels and rent on hotel rooms
must be reduced.
10. Mumbai Hotel industry has affected badly in Covid 19 Pandemic.
11. Prices of hotel rooms have gone down in Covid 19 Pandemic period.

90
 12. Majority of respondents are booking hotel rooms with price which includes
GST.

Following was data collection from hotels

1. Hotel business has increased after GST implementation as per respondents. 2. Hotel
room books has enhanced after GST implementation as suggested by respondents.

3. Rooms rate has increased after GST implementation.

4. Cost of foods has enhanced after implementation of GST.
5. Hotels were calming Input tax credit under GST law.
6. Hotels were passing Input tax credit benefit to customers as advocated by
respondents

7. Mumbai Hotel Industry had been affected due to covid-19 pandemic as per
respondents

8. Respondents suggested that rent of hotel rooms gone down incovid-19 pandemic. 9.
Respondents feels Goods and Service Tax rates on sale of food in hotels and rent on
hotel rooms must be reduced.

10.Cost of foods had enhanced after GST implementation as recommended by

respondents

11.Respondents think Hotel Industry business has affected due to GST implementation.
12.54.50% respondents replied GST is better than VAT and Service Tax.

91
Chapter N0: 6 bibliography

BIBLIOGRAPHY:
1. GST E-Book From www.GST.com
2. 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
6. Monika, S., & Dhanda, U. (2015). GST In India: a Key Tax Reform,
International Journal of Research Granthaalayah, 3 (12) p133, 141...
7. Khurana, A., & Sharma, A. (2016). Goods and services tax in India-A
positive reform for indirect tax system. International Journal of Advanced
Research, 4(3), 500-505.
8. Gritish, G. (2014). Basic concepts and features of Goods and Service Tax in
India. International Journal of Scientific Research and Management,
9. Khurana, A., & Sharma, A. (2016). Goods and services tax in India-A
positive reform for indirect tax system. International Journal of Advanced
Research, 4(3), 500-505.
10. Sinha A (2016) Impact of GST on various sectors in India. Business world.
11. Bureau, E. T. (2016). GST impact across sectors: Take a look at winners and
Losers. The Economic Times.
12. India, F. (2016). Rajya Sabha passes GST Bill: How it will impact various
sectors,
13. Khatik, S. K., & Nag, A. K. (2019). Impact of gst on Indian hotel and
restaurant business. International Journal of Management, IT and
Engineering, 9(3), 128-137.
14. .Chauhan, P. H. (2019). APPLICABILITY OF GST ON
RESTAURANTSBILLS,
15. TAX RATES AND SERVICE CHARGES IN INDIA. Advance and
InnovativeResearch, 184.

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WEBLIOGRAPHY:

• www.gst.gov.in
• www.gst.com
• www.gstewaybill.com
• www.google.com
• www.gstinindia.com
• www.gstcouncil.gov.in
• https://selfservice.gstsystem.in

IX
 APPENDIEX

• NAME

• GENDER

MALE
FEMALE

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) N0
(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

X
5.Have your hotel received benefits after GST application?
(a) YES
(b) N0
(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
(c) CAN

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

(a) GOOD (b)
BAD

(c) CANT’SAY

9. Has your customers replied positively about GST application?

(a)YES
(b)NO
(c) MAY BE

(d)CANT’SAY
10. Is application of GST positively influence on your restaurant's performance in the
market?
(a) AGREE
(b) DISAGREE
(c) NEUTRAL

XI
11.Is your working environment is a safe because of applying GST?
(a)YES
(b)NO
(c) MAYBE

(d)CANT’SAY

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

(c) CANT’SAY

13.Is there any difference between facilities provided before and after GST?
(a)YES
(b)NO
(c) MAY BE

14.What is overall perception about hotel and restaurant?

(a)POSITIVE
(b)NEGATIVE

15. how has the implementation of GST affected the pricing of food and beverages in
hotel restaurants?

16.What is your monthly income?

(a)LESS THAN 30 THOUSAND
(b) 30-40 THOUSAND
(c) GREATER THAN 40 THOUSAND

XII
17.Is your profile on any app like Swiggy or Zomato?
(a)YES
(b)NO
18. Are there any exemptions for GST on hotel rooms?
(a)YES
(b)N0

19.Is GST applicable to room service charges in hotels?

(a)YES
(b)NO

20. GST is a _ _ _ _ _ based tax on consumption of goods and services.

(a)DUARATION
(b)DESTINATION
(c) DIVIDEND

XIII