Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc.

Circular No.: 27/01/2018-GST
Date of Circular: 4th January 2018
Relevant Sections and Rules:

• Central GST Act, 2017:
  • Section 10(1)(b): Composition levy for food service
  • Section 15: Value of supply
  • Section 22(1): Threshold for registration
  • Section 24(ix): Compulsory registration through ECO
• CGST Rules, 2017: Related to determination of tax rate and valuation
• Relevant Notifications:
  • Notification No. 11/2017-CT (Rate) dated 28.06.2017
  • Notification No. 17/2017-CT (Rate)
  • Notification No. 55/2017-CT dated 15.11.2017

Summary of Circular:

This circular addresses multiple queries received regarding the levy of GST on various services, including accommodation, casino and horse racing, cinema, homestays, legal and printing services.

1. Accommodation Services – Declared Tariff vs Actual Tariff:
   • GST rate is determined based on the declared tariff, but tax is applied on the actual amount charged.
   • If multiple tariffs are declared, the highest is considered.
   • Declared tariff on date of supply (actual stay) is to be applied.
   • For upgrades, GST is levied based on the declared rate of the upgraded room.
2. Casino Entry & Gambling:
   • 28% GST applies on:
     • Entry to casinos
     • Gambling/betting based on transaction value (bet amount)
   • This is in addition to tax on food, drinks, or other services at the casino.
3. Horse Racing:
   • GST at 28% is levied on entire bet value, i.e., face value placed with totalisator or bookmakers.
4. Clarification on Taxable Value in Specific Services:
   • Declared tariff does not include tax for purposes like cinema or hotel accommodation.
   • Room rent for hospital in-patients is exempt.
   • Bakeries offering dine-in service pay composition GST @ 5% under Section 10(1)(b).
5. Homestays via E-commerce Operators (ECO):
   • If total turnover is below threshold (₹20 lakh/₹10 lakh) and services are booked via ECO, the ECO is liable for GST, not the homestay owner.
   • Such providers are not required to register under GST.
6. Printing and Publishing of Books:
   • Printing/selling of books with acquired copyright is treated as supply of goods, not services, provided seller owns and controls the books.
7. Legal Services – Reverse Charge:
   • All legal services (including non-representational) provided by advocates or senior advocates to business entities are taxable under reverse charge mechanism.

Source: Circular No.: 27/01/2018-GST