Project Report On

(IMPACT OF GST ON HOTEL AND TOURISM INDUSTRY)

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

UNIVERSITY OF MUMBAI
MASTER OF COMMERCE
(ACCOUNTANCY / MANAGEMENT)
Semester- III / IV
(2021–22)
Project Guidance by
Professor:  (UDAY SHETTY)

UTTARI BHARTI SABHA’S

RAMANAND ARYA D.A.V COLLEGE OF COMMERCE AND SCIENCE
DATAR COLONY, BHANDUP (EAST)

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 RamanandArya D.A.V. College

Bhandup (East) Mumbai 400042

Certificate

This is to certify that (VIGHNESH SATYAVAN CHAVAN )has worked and duly completed his/her Project
Work for the degree of Master in Commerce under the Faculty of Commerce in the subject of (FINANCIAL
ACCOUNTING) and his/her project is entitled, (IMPACT OF GST ON HOTEL AND TOURISM
INDUSTRY)under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it has
been submitted previously for any Degree or Diploma of any University.

It is his/her own work and facts reported by her/his personal findings and investigations.

Co-Ordinator: Principal:

DR. AJAY M. BHAMARE

Project Guide/Internal Examiner: External Examiner:

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 RamanandArya D.A.V. College

Bhandup (East) Mumbai 400042

Declaration by learner

I, the undersigned (VIGHNESH SATYAVAN CHAVAN )declare that the work embodied in this project work
hereby, titled (IMPACT OF GST ON HOTEL AND TOURISUM INDUSTRY), forms my own contribution
to the research work carried out under the guidance of(UDAY SHETTY) is a result of my own research work
and has not been previously submitted to any other University for any other Degree to this or any other
University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in accordance
with academic rules and ethical conduct.

Name of the learner:   

Signature:

Certified by

Name of the Guiding Teacher:

Signature:

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 Acknowledgment

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. Ajay M. Bhamarefor providing the necessary facilities required for
completion of this project.

I take this opportunity to thank our Coordinator (NAME OF COORDINATOR), for her moral support and
guidance.

I  would  also like  to express my  sincere gratitude  towards my project    guide (UDAY SHETTY)whose
guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and magazines related
to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion of
the project especially my Parents and Peers who supported me throughout my project.

Signature of the Student

(VIGHNESH SATYAVAN CHAVAN )

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5
 INDEX

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

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

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 CONTENT

Chapter Introduction Pages

No.
1.1 Introduction 10
1.2 INTRODUCED GST 11
1.3 Status of GST in India 13
1.4 HISTORY OF GST IN INDIA 16
1.5 About Goods and Services Tax Network (GSTN) 21
1.6 GST Council meeting 22
1.7 Salient features of GST are as under 27
1.8 OBJECTIVES OF GST 28
1.9 TYPE OF GST 29
1.10 Overview on Impact of GST in Hotel Industry 32
1.11 GST IMPACT ON OUR REGULAR FOOD BILL 33
1.12 Hotel industry 35
1.13 Impact of GST On hotel sector 37
1.14 Tax rate under GST for hotels and restaurant. 39
1.15 Booking a hotel after GST rollout 40
Research methodology
2.1 Introduction of Research Methodology 43
2.2 RESEARCH DESIGN 44
2.3 GST on Hotel Industry 47
2.4 SCOPE OF THE STUDY 49
2.5 OBJECTIVES OF THE STUDY 51
2.6 Limitation of the study 52
2.7 Meaning of Hypothesis 52
Chapter Literature Review 53
no.
Chapter Data Analysis and Interpretation 57
no.
Chapter Conclusion 70
no.

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8
 Introduction to hotel and tourism industry

A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel
room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality
beds, a dresser, a refrigerator and other kitchen facilities, upholstered chairs, a flat screen television,
and en-suite bathrooms. Small, lower-priced hotels may offer only the most basic guest services and facilities.
Larger, higher-priced hotels may provide additional guest facilities such as a swimming pool, business centre
(with computers, printers, and other office equipment), childcare, conference and event facilities, tennis or
basketball courts, gymnasium, restaurants, day spa, and social function services. Hotel rooms are
usually numbered (or named in some smaller hotels and B&Bs to allow guests to identify their room. Some
boutique, high-end hotels have custom decorated rooms. Some hotels offer meals as part of a room and board
arrangement. In Japan capsule hotels provide a tiny room suitable only for sleeping and shared bathroom
facilities.

Tourism means people traveling for fun and adventure.It includes activities such as sightseeing and camping
People who travel for fun are called "tourists". Places where many tourists stay are sometimes called "resorts".
Places that people go to for tourism are called tourist destinations.

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

● Places to stay; such as hotels, camping grounds or parks, youth hostels, and bed and breakfasts.
● Food and drink; such as restaurants cafes and bars.
● Tour guide show people supply local knowledge of a place.

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10
 Introduction to GST

India, as world’s one of the biggest democracies in the world, follows the federal tax system for levy and
collection of various taxes. Different types of indirect taxes are levied and collected at different points in the
supply chain. The Centre and the States are empowered to levy respective taxes as per the Constitution of India.
The Value-added tax (VAT), when introduced, was considered to be a major improvement over the pre-existing
central excise duty at the national level and the sales tax at the state level. Now the Goods and Service Tax
(GST) has been a further significant breakthrough – the next logical step towards a comprehensive indirect tax
reform in the country.

The Goods and Services Tax (GST) has been the biggest and substantial indirect tax reform in India
since 1947. The main idea of GST was to replace the then existing taxes like value-added tax, excise duty,
service tax and sales tax. GST as it is known as all set to be a game changer for the Indian economy.

GST was launched at midnight on 1st July 2017 by the president of India, Pranab Mukherjee and Prime
Minister, Narendra Modi. The launch was marked by a historic midnight session of both houses of the
Parliament convened at the central hall of the Parliament.

The 122nd Amendment Act Bill sought to amend the constitution to introduce the GST wide proposed
new article 246A. This new article gave power to Legislature of every state and Parliament to make laws with
respect to GST where the supplies of goods or of services take place. GST has been applicable throughout India,
and has replaced multiple cascading taxes levied by the Central and State Government.

GST is levied at all stages right from manufacture/import of goods up to final consumption with credit
of taxes paid at previous stages available as credit against output tax liability arising out of the outward supply (
popularly known as seamless flow of credit of taxes). In a nutshell, only value addition is to be taxed and
burden of tax is to be borne by the final consumer.

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12
 STATUS OF GST IN INDIA

GST was implemented to overcome various problems with the existed tax system that was running for long
time in the country and there were a larger number of professional and tax authority was also much familiar and
having expertise in this field, even the process was less digital but the taxpayer and authority was having
command on the procedural aspect of the taxation. One of the biggest loss here is that GST is new to us and
GST Authority itself are not enough competent to overcome the obstacle taxpayer facing and there is also lack
of professional in the market to advise the clients how to interpret the specific law of GST and save itself from
legal action that can be taken by the govt. against the taxpayers. Since the GST has widen its base by around
85% which is covering the SMEs located in backward areas and rural side and they don’t want to comply the
provision in the hope that compliances will increase their cost and burden. They are not hiring the qualified
professional for compliances which is resulting in more errors in their return and leading to cancelation of
registration. The main motto of GST launching was to eliminate the multiple procedures and multiple tax
structure from the economy but the same problems still existed in the new system. There is multitude of tax rate
ranging 5%, 12%, 18% and 28% and requiring multiple procedure and multiple compliances to be adhered to
which is not a sign of smoothening the business process in India. International Monetary Fund (IMF) has also
advised the govt. to simplify the GST process to smoothen the business. In GST regime most of the products
which are of necessary use for public at large are covered under 18% tax slab which is resulted  in reduction of
price because in pre GST regime there were multiple taxes imposed reaching up to 32% around. Other tax slab
is 28% which is covering luxury and sin goods and is the great source of revenue for the govt. Out of total state
in India around 14 state showing increases in their revenue as compared to pre GST regime and there is no need
to fill the revenue gap by the central govt. to state govt. Further there are a no of weakness in the GST system
from which taxpayer struggling alike return filing and reconciliation system of GSTN Network. Report this ad
We can conclude that at present there are various issues with GST but the govt. is seeing bright future ahead.
Government is trying to simply the GST to overcome the present issue and to exhibit the belief of taxpayer on
the new GST system.

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 HISTORY OF GST IN INDIA
Formation
The reform of India's indirect tax regime was started in 1986 by Vishwanath Pratap Singh, Finance Minister
in Rajiv Gandhi’s government, with the introduction of the Modified Value Added Tax (MODVAT).
Subsequently, Prime Minister P V Narasimha Rao and his Finance Minister Manmohan Singh, initiated early
discussions on a Value Added Tax (VAT) at the state level. A single common "Goods and Services Tax (GST)"
was proposed and given a go-ahead in 1999 during a meeting between the Prime Minister Atal Bihari Vajpayee
and his economic advisory panel, which included three former RBI governors IG Patel, Bimal Jalan and C
Rangarajan.Vajpayee set up a committee headed by the Finance Minister of West Bengal Asim Dasgupta to
design a GST model.

The Asim Dasgupta committee which was also tasked with putting in place the back-end technology and
logistics (later came to be known as the GST Network, or GSTN, in 2015). It later came out for rolling out a
uniform taxation regime in the country. In 2002, the Vajpayee government formed a task force under Vijay
Kelkar to recommend tax reforms. In 2005, the Kelkar committee recommended rolling out GST as
suggested by the 12th Finance Commission.

After the defeat of the BJP-led NDA government in the 2004 Lok Sabha election and the election of a
Congress-led UPA government, the new Finance Minister P Chidambaram in February 2006 continued work
on the same and proposed a GST rollout by 1 April 2010. However, in 2011, with the Trinamool Congress
routing CPI(M) out of power in West Bengal Asim Dasgupta resigned as the head of the GST committee.
Dasgupta admitted in an interview that 80% of the task had been done.

The UPA introduced the 115th Constitution Amendment Bill on 22 March 2011 in the Lok Sabha to bring
about the GST. It ran into opposition from the Bharatiya Janata Party and other parties and was referred to a
Standing Committee headed by the BJP's former Finance Minister Yashwant Sinha. The committee
submitted its report in August 2013, but in October 2013 Gujarat Chief Minister Narendra Modi raised
objections that led to the bill's indefinite postponement.The Minister for Rural Development Jairam Ramesh
attributed the GST Bill's failure to the "single handed opposition of Narendra Modi".

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 In the 2014 Lok Sabha election the Bharatiya Janata Party (BJP)-led NDA government was elected into
power. With the consequential dissolution of the 15th Lok Sabha the GST Bill – approved by the standing
committee for reintroduction – lapsed. Seven months after the formation of the then Modi government the
new Finance Minister Arun Jaitley introduced the GST Bill in the Lok Sabha where the BJP had a majority.
In February 2015, Jaitley set another deadline of 1 April 2017 to implement GST. In May 2016, the Lok
Sabha passed the Constitution Amendment Bill, paving way for GST. However, the Opposition, led by the
Congress, demanded that the GST Bill be again sent back for review to the Select Committee of the Rajya
Sabha due to disagreements on several statements in the Bill relating to taxation. Finally, in August 2016, the
Amendment Bill was passed. Over the next 15 to 20 days, 18 states ratified the Constitution amendment Bill
and the President Pranab Mukherjee gave his assent to it.

A 21-member selected committee was formed to look into the proposed GST laws. .After GST Council approved
the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill
2017 (The IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods and
Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill), these Bills were passed by the
Lok Sabha on 29 March 2017. The Rajya Sabha passed these Bills on 6 April 2017 and were then enacted as
Acts on 12 April 2017. Thereafter, State Legislatures of different States have passed respective State Goods and
Services Tax Bills. After the enactment of various GST laws, Goods and Services Tax was launched all over
India with effect from 1 July 2017. The Jammu and Kashmir state legislature passed its GST act on 7 July 2017,
thereby ensuring that the entire nation is brought under a unified indirect taxation system. There was to be no
GST on the sale and purchase of securities. That continues to be governed by Securities Transaction Tax (STT).

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Implementation
The GST was launched at midnight on 1 July 2017 by the President of india and the government of india.
The launch was marked by a historic midnight (30 June – 1 July) session of both the houses of parliament
convened at the Central Hall of the Parliament. Though the session was attended by high-profile guests
from the business and the entertainment industry including Ratan tata, it was boycotted by the
opposition due to the predicted problems that it was bound to lead for the middle and lower class Indians.
The tax was strongly opposed by the opposing Indian National Congress. It is one of the few midnight
sessions that have been held by the parliament - the others being the  decleration of india’s
independence on 15 August 1947, and the silver and golden jubblies of that occasion. After its launch, the
GST rates have been modified multiple times, the latest being on 22 December 2018, where a panel of
federal and state finance ministers decided to revise GST rates on 28 goods and 53 services.

Members of the congress boycotted the GST launch altogether. They were joined by members of
the Trinamool congress, comunist party of india, and the DMK. The parties reported that they found virtually
no difference between the GST and the existing taxation system, claiming that the government was trying to
merely rebrand the current taxation system. They also argued that the GST would increase existing rates on
common daily goods while reducing rates on luxury items, and affect many Indians adversely, especially the
middle, lower middle and poorer income groups.

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REVERSE CHARGE MECHANISM (RCM) ON SECURITY SERVICES w.e.f. 1st January,
2019

RCM is one of the method to collect indirect taxes by the Government, under which a recipient (i.e. Buyer) who
procures goods or services is required pay the taxes directly to tax authorities.
As per Notification No. 13/2017- Central Tax (Rate) dated 28th June, 2017, the Central Government on the
recommendations of the Council notified certain categories of supply of services on which central tax shall be
paid on reverse charge basis by the recipient of the services w.e.f. 1st day of July, 2017.

While exercising the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax
Act, 2017, the Central Government, on the recommendations of the Council, made amendment in the
Notification No.13/2017- Central Tax (Rate), dated the 28th June, 2017 vide Notification No. 29/2018- Central
Tax (Rate) dated 31st December, 2018 brought RCM on Security Services provided to a registered person by
any person other than a body corporate w.e.f. 1st day of January, 2019. e.g.

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Exceptions:-

However these provisions will not apply to:

(i) (a) a Department or Establishment of the Central Government or State Government or Union territory; or

(b) local authority; or

(c) Governmental agencies; which has taken registration under the Central Goods and Services Tax Act, 2017
(12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable
supply of goods or services; (TDS Purpose) or
(ii) a registered person paying tax under section 10. (Composition Dealer)

The year 2017 will forever be etched in Indian history as the year that saw the implementation of the biggest
and most important economic reform since Independence - the Goods and Services Tax (GST). The reform that
took more than a decade of intense debate was finally implemented with effect from 1 July 2017, subsuming
almost all indirect taxes at the Central and State levels.

GST, which was publicised as ‘one nation, one tax’ by the government, aims to provide a simplified, single tax
regime in line with the tax framework applicable in several major economies across the Globe. This single tax
has helped streamline various indirect taxes and brought in more efficiencies in business. GST law in India is
a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

The implementation of the GST got overwhelming support from the industry. The industry took this as an
opportunity to redefine supply-chain model, customise IT processes, and evaluate internal and external
arrangements to safeguard interest and minimise their tax costs.

As the GST journey progressed, there was a growing realisation of its far-reaching impact. Industry faced
various challenges, ranging from new and unique concepts, complex documentation, the high rates of certain
goods and services to complex or unclear treatment of several common transactions. The matching concept for
claiming credits, adverse and contrary advance rulings, clarity on aspects relating to Anti-Profiteering, GST
refunds etc. are some of the some of the emerging challenges that the businesses be mindful of.

However, it should also be appreciated that the authorities have been quick to address public concerns by
issuing a series of notifications, clarifications, press releases and FAQs, to resolve a wide range of issues.

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There is hope that GST 2.0, which is at the works currently, will be a much improved version compared to the
first one. The government has come out with new return filing process. There have been multiple reduction in
tax rate for various goods. With the objective to curb tax evasion, the government has also introduced the E-way
bill system across India, to track movement of goods

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 Levy of GST:

⮚ It is a dual levy with State/union territory GST and Central GST.

⮚ Intra – state supplies attract CGST + SGST/UTGST.

⮚ Intra – state supplies IGST which is the sum total of CGST and SGST/UTGST.

Exclusions under GST:

⮚ Basic customs duty on import of goods into India.

⮚ Petroleum products (petrol, diesel, ATF, natural gas and crude oil)

⮚ Alcohol for human consumption.

⮚ Stamp duty and Real Estate.

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 HISTORY OF GST IN INDIA

India's biggest tax reform in the 70 years of independence is implementation of GST (Goods and Services Tax),
which will help modernise India as Asia's third largest economy. The 17-year-old dream of GST in India unify
the US $2 trillion economy with 1.3 billion people into a single market.

 
Nationwide Goods and Services Tax (GST) has came into effect from 1 July, 2017. This is the marvelous way
for a new Common National Market and replaced several cascading indirect taxes levied by the central and state
governments.
 
World’s first country implemented GST is France (in the year 1954). More than 160 countries have
implemented GST system. Framework of GST in India had formed 17 years ago. The first move on GST
implementation in India was began on July 17, 2000, under Vajpayee Government. In 12 August 2016, Assam
became the first state to pass GST. On September 23, 2016, GST Network was formed, it is an online network
designed to solve the problems and questions of consumers and businessmen.

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History of GST in India - Detailed Events:
The detailed events according to various timelines for GST implementation in India is granted below:

⮚ During 1999:The idea of Goods and Services Tax (GST) in India started during meeting held in 1999

between Prime Minister Atal Bihari Vajpayee and his economic advisory panel, which included three
former RBI governors namely IG Patel, Bimal Jalan and C Rangarajan.

⮚ 2000: In India, the idea of adopting GST was first suggested by the Atal Bihari Vajpayee Government in
2000. The state finance ministers formed an Empowered Committee (EC) to create a structure for GST,
based on their experience in designing State VAT. Representatives from the Centre and states were
requested to examine various aspects of the GST proposal and create reports on the thresholds,
exemptions, taxation of inter-state supplies, and taxation of services. The committee was headed by
Asim Dasgupta, the finance minister of West Bengal. Dasgupta chaired the committee till 2011.

⮚ 2004: A task force that was headed by Vijay L. Kelkar the advisor to the finance ministry, indicated that
the existing tax structure had many issues that would be mitigated by the GST system.

⮚ February 2005: The finance minister, P. Chidambaram, said that the medium-to-long term goal of the
government was to implement a uniform GST structure across the country, covering the whole
production-distribution chain. This was discussed in the budget session for the financial year 2005-06.

⮚ February 2006: The finance minister set 1 April 2010 as the GST introduction date.

⮚ November 2006: Parthasarthy Shome, the advisor to P. Chidambaram, mentioned that states will have to
prepare and make reforms for the upcoming GST regime.

⮚ February 2007: The 1 April 2010 deadline for GST implementation was retained in the union budget
for 2007-08
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⮚ February 2008: At the union budget session for 2008-09, the finance minister confirmed that
considerable progress was being made in the preparation of the roadmap for GST. The targeted timeline
for the implementation was confirmed to be 1 April 2010.

⮚ July 2009: Pranab Mukherjee, the new finance minister of India, announced the basic skeleton of the
GST system. The 1 April 2010 deadline was being followed then as well.
⮚ November 2009: The EC that was headed by Asim Dasgupta put forth the First Discussion Paper (FDP)
, describing the proposed GST regime. The paper was expected to start a debate that would generate
further inputs from stakeholders
⮚ February 2010: The government introduced the mission-mode project that laid the foundation for GST.
This project, with a budgetary outlay of Rs.1,133 crore, computerised commercial taxes in states.
Following this, the implementation of GST was pushed by one year.

⮚ March 2011: The government led by the Congress party puts forth the Constitution (115th Amendment)
Bill for the introduction of GST. Following protest by the opposition party, the Bill was sent to a
standing committee for a detailed examination.

⮚ June 2012: The standing committee starts discussion on the Bill. Opposition parties raise concerns over
the 279B clause that offers additional powers to the Centre over the GST dispute authority.

⮚ November 2012: P. Chidambaram and the finance ministers of states hold meetings and set the deadline
for resolution of issues as 31 December 2012.

⮚ February 2013: The finance minister, during the budget session, announces that the government will
provide Rs.9,000 crore as compensation to states. He also appeals to the state finance ministers to work
in association with the government for the implementation of the indirect tax reform.

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⮚ August 2013: The report created by the standing committee is submitted to the parliament. The panel
approves the regulation with few amendments to the provisions for the tax structure and the mechanism
of resolution.

⮚ October 2013: The state of Gujarat opposes the Bill, as it would have to bear a loss of Rs.14,000 crore
per annum, owing to the destination-based taxation rule.

⮚ May 2014: The Constitution Amendment Bill lapses. This is the same year that Narendra Modi was
voted into power at the Centre.

⮚ December 2014: India’s new finance minister, Arun Jaitley, submits the Constitution (122nd
Amendment) Bill, 2014 in the parliament. The opposition demanded that the Bill be sent for discussion
to the standing committee.

⮚ February 2015: Jaitley, in his budget speech, indicated that the government is looking to implement the
GST system by 1 April 2016.

⮚ May 2015: The Lok Sabha passes the Constitution Amendment Bill. Jaitley also announced that
petroleum would be kept out of the ambit of GST for the time being.

⮚ August 2015: The Bill is not passed in the Rajya Sabha. Jaitley mentions that the disruption had no
specific cause.

⮚ March 2016: Jaitley says that he is in agreement with the Congress’s demand for the GST rate not to be
set above 18%. But he is not inclined to fix the rate at 18%. In the future if the Government, in an
unforeseen emergency, is required to raise the tax rate, it would have to take the permission of the
parliament. So, a fixed rate of tax is ruled out.

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⮚ June 2016: The Ministry of Finance releases the draft model law on GST to the public, expecting
suggestions and views.

⮚ August 2016: The Congress-led opposition finally agrees to the Government’s proposal on the four
broad amendments to the Bill. The Bill was passed in the Rajya Sabha.

⮚ September 2016: The Honourable President of India gives his consent for the Constitution Amendment
Bill to become an Act.

⮚ 2017: On 16 January, 2017, Jaitley announces 1 July, 2017 as GST rollout deadline.

On 20 March, 2017, Cabinet approved CGST, IGST and UT GST and Compensation bills.
On 27 March, 2017, Lok Sabha and Rajya Sabha pass all the four key GST Bills - Central GST (CGST),
Integrated GST (IGST), State GST (SGST) and Union Territory GST (UTGST).

On 18 May, 2017, the GST Council fits over 1,200 goods in one of the four rates of GST (5%, 12%,
18%, 24%).
On 19 May, 2017, the GST Council decides on 5, 12, 18 and 28 percent as service tax slabs.
On 20 May, 2017, GST Council fixed four GST tax rates in India (5%, 12%, 18%, 24%) for all goods
and services.
During Midnight of 30 June, 2017 - GST came into force across India except Jammu & Kashmir.During
Midnight of 7 July, 2017 - Jammu and Kashmir, the only State missed to adopt the Goods and Services
Tax (GST) on July 1, finally joined the GST

25
26
 About Goods and Services Tax Network (GSTN):

"Goods and Services Tax" Network (GSTN) is a non-profit organisation, set up by the Government as a private
company under erstwhile Section 25 of the Companies Act, 1956. The main purpose of GSTN is to create a
website/platform for all the GST related concerned parties, namely stakeholders, government and taxpayers to
collaborate on a single portal. GSTN would provide three front end services, namely registration, payment and
return to taxpayers. Besides providing these services to the taxpayers, GSTN would be developing back-end IT
modules for 25 States.

Infosys is appointed as Managed Service Provider (MSP) at a total project cost of around Rs 1380 crores for a
period of five years. Goods and Services Tax Network (GSTN) has selected 34 IT, ITeS and financial
technology companies, to be called GST Suvidha Providers (GSPs).

GST Rate Classification:

▪ 0% - Essential food and medicines, newspaper, education services, residential accommodation.

▪ 0.25% - Diamonds, other precious stones.

▪ 3% - Gold, silver, platinum, articles of jewellery.

▪ 5% - Common use items, sweets, restaurant services, goods transport services.

▪ 12% - Frozen meat, butter and cheese, Namkeens, Milk beverages.

▪ 18% - Standard rate for goods and services.

▪ 28% - Luxury and sin goods such as motor vehicles (additional cess imposed on certain luxury goods)
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28
 GST Council meeting:

The GST Council met for the 31st time on 22nd December 2018, Saturday at Vigyan Bhavan, New Delhi.

It was chaired by the Finance Minister Shri Arun Jaitley.

Highlights were Rate tweaks, relief in the form of due date extensions, clarity on GST 2.0 Implementation and
streamlining of GST compliance like return filing, registration and refund procedure on the portal.

. GST Rates rationalised:

● Today’s GST rates reduction will have an overall impact on revenue of Rs 5500 crore, said Jaitley.
● Recommendations made by the Fitment committee reports have been taken into consideration in today’s
meet.
● No change in tax rate on Cement: 13 items of automobile parts, 8 items of the cement industry still
remain under 28 %GST Slab.
● Third party insurance lowered to 12 per cent GST Slab from the earlier 18%.
● 6 goods and 1 service have been removed from the 28 % GST Slab tax bracket under the Good Services
Tax (GST) regime.

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● GST for cinema tickets being less than Rs 100 has a reduced tax rate from 18% to 12% GST Slab, for
tickets equal to or above Rs 100, GST reduced from 28% to 18%.
● Lithium-ion batteries charges, video games consoles, small sport related items, accessories for carriages
for disabled removed from 28% slab.
● Items claimed to be used by the upper segments such as Air conditioners, dishwashers will remain at
28% GST Slab.
● Bank charges (savings bank), and PradhanMantri Jan DhanYojana has been exempted from GST.
● GST rate on special flights for pilgrims slashed for the economy to 5 per cent and business class to 12
per cent. These include travel by non-scheduled/chartered operations for religious pilgrimage, which is
facilitated by Go I under bilateral agreements.

Broadly, the expectations of 31st GST Council meeting were:

● Deliberations on announcing GST rates on Petrol and Diesel.

● GST Rate cut highly likely for Housing sector with two proposals before the Council:
1. To slash GST rate from the existing 12% to 8%, in order to bring it at par with the affordable housing
with ITC claim option
2. To slash the GST rate to 5% without the ITC claim option

● Decision to be taken on the reports submitted by the sub-committees formed for analysing GST on
Sugar and Cess in case of exigencies.

● Speculations are high that the council is expected to discuss the proposal in what could effectively slash
tax rate from the highest tax slab of 28% to 18%. Goods such as cement, computer monitor and power
banks and services like third-party vehicle insurance are going to face rate cuts. The intention seems to
be to rationalise GST rates excluding items from the 28 per cent slab and restrict the same to sin goods
or luxury goods.

● Decision on simplification of GSTR-9 Annual returns

30
 Salient features of GST are as under:

i. GST would be applicable on sale of goods and services as against the present concept of tax on the
manufacture of goods.
ii. GST would be destination based tax as against the present concept of origin based tax.
iii. It would be a dual GST. The GST levied by the Centre would be called Central GST (CGST) and
that to be levied by the states would be called State GST (SGST).
iv. An Integrated GST (IGST) would be levied on inter-state supply of goods or services. This would be
collected by the centre.
v. Import of goods or services would be treated as inter-state supplies and would be subject to IGST in
addition to applicable custom duties.
vi. GST would replace the following taxes currently levied and collected by the Centre:
a) Central Excise Duty (including additional Duties of Excise)
b) Service Tax.
c) CVD (levied on imports in lieu of Excise Duty)
d) SACD (levied on imports in lieu of VAT)
e) Central Sales Tax (CST)
f) Excise Duty levied on Medicinal & Toiletries preparations.
g) Surcharges and cesses.
vii. State taxes that would be subsumed within GST are:
a) VAT/ Sales Tax
b) Entertainment Tax
c) Luxury Tax
d) Taxes on Lottery, betting and gambling.
e) Surcharges & Cesses.

31
viii. GST would apply to all goods & services except Alcohol for human consumption, Electricity and
Real Estate.
ix. The list of exempted goods & services would be kept to a minimum and would be harmonised for
the Centre and States as far as possible.
x. The credit would be permitted to be utilised in the following manner:
a) ITC of CGST allowed for payment of CGST & IGST in that order.
b) ITC of SGST allowed for payment of SGST & IGST in that order.
c) ITC of IGST allowed for payment of IGST, CGST & SGST in that order

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 OBJECTIVES OF GST

⮚ Ensuring that the cascading effect of tax on tax will be eliminated.

⮚ Improving the competitiveness of the original goods and services, thereby improving the GDP rate too.

⮚ Ensuring the availability of input credit across the value chain.

⮚ Reducing the complications in tax administration and compliance.

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

country.

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

Reducing the tax slab rates to avoid further clarification issues.

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34
 TYPE OF GST

Hence, you can say that there are four types of GST:

▪ Central Goods and Services Tax

▪ State Goods and Services Tax

▪ Integrated Goods and Services Tax

▪ Union Territory Goods and Services Tax

CGST full form is Central Goods and Services Tax.

CGST refers to the Central GST tax that is levied by the Central Government of India on any transaction of
goods and services tax taking place within a state. It is one of the two taxes charged on every intrastate (within
one state) transaction, the other one being SGST (or UTGST for Union Territories). CGST replaces all the
existing Central taxes including Service Tax, Central Excise Duty, CST, Customs Duty, SAD, etc. The rate of
CGST is usually equal to the SGST rate. Both taxes are charged on the base price of the product. See the example
below to understand it better.

e.g. – In the example above, when Suresh sales a product to Pradeep in the same state (Rajasthan), he has to pay
two taxes. CGST is for the central government while SGST is for the state. The rate of CGST is 9%, same as
SGST. After the application of CGST (9% of Rs 10,000), the final cost of the product will become Rs 11,800

35
 SGST full form is State Goods and Services Tax.

SGST (State GST) is one of the two taxes levied on every intrastate (within one state) transaction of goods and services.
The other one is CGST.  SGST is levied by the state where the goods are being sold / purchased. It will replace all the
existing state taxes including VAT, State Sales Tax, Entertainment Tax, Luxury Tax, Entry Tax, State Cesses and Surcharges
on any kind of transaction involving goods and services. The State Government is the sole claimer of the revenue earned
under SGST. Let’s understand this with an example.

e.g. – Suresh from Rajasthan wants to sell some goods to Pradeep in Rajasthan. The product, originally priced at Rs
10,000, will attract GST at 18% rate comprising of 9% CGST rate and 9% SGST rate. The SGST tax amount here is Rs
900 (9% of Rs 10,000) which is fully claimed by the Rajasthan State Government. The rate of the product after SGST will
be Rs 10,900.

IGST full form is Integrated Goods and Services Tax.

Integrated GST (IGST) is applicable on interstate (between two states) transactions of goods and services, as well as on
imports. This tax will be collected by the Central government and will further be distributed among the respective states.
IGST is charged when a product or service is moved from one state to another. IGST is in place to ensure that a state has
to deal only with the Union government and not with every state separately to settle the interstate tax amounts. Let’s try
to understand IGST with an example.

e.g., – Ramesh is a manufacturer in Rajasthan who sold goods worth Rs 10,000 to Suresh in Rajasthan. Since it is an
interstate transaction, IGST will be applicable here. Let’s assume the GST rate is 18% for the particular item. So, the
IGST amount charged by the Central Government will be Rs 1800 (18% of Rs 10,000), and the refined rate of the product
will be Rs 11,800.

UTGST full form is Union Territory Goods and Services Tax.

The Union Territory Goods and Services Tax, commonly referred to as UTGST, is the GST applicable on the goods and
services supply that takes place in any of the five Union Territories of India, including Andaman and Nicobar Islands,
Dadra and Nagar Haveli, Chandigarh, Lakshadweep and Daman and Diu. This UTGST will be charged in addition to the
Central GST (CGST) explained above. For any transaction of goods/services within a Union Territory: CGST + UTGST

36
Overview on Impact of GST in Hotel Industry:

The restaurant industry has regularly been under the scanner since demonetization. This industry in India is on
constant growth and is now impacted with GST – Goods and service tax. Hence, we thought of giving you a
detailed impact analysis about GST on the restaurant industry. If we talk of GST in simple terms, it is going to
make luxury restaurants unhappy since they are likely to be more impacted and will have to pay whopping 28%
GST tax.

Our goal in this article is to elaborate how restaurant food bills will look with the effect of GST. We will also
see how end consumer will pay with the GST effect.

If we look at the current statistics of the restaurant market industry, as per Indian Food Service Report 2016 it is
estimated to be worth 3.09 Lakh Crore. The report also stated that the food market of the country has directly
employed more than 5.8 million in 2016. One of the key contributors to this growth is the middle-class sector of
the country. With access to the lifestyle adopted by western countries, women empowerment gaining stand, high
disposable income and reliable mobile network availability, this section of society contribute more to the growth
of most of the businesses in the country.
This reflection is seen in the enviable waiting during weekends at almost every restaurant around the corner of
the city be it small or a metro. With this being noted, the biggest question right now is how many of us have
actually looked into our restaurant bill? We hardly know how much we are paying for actual bill. Let’s analyze
how much we are going to pay with GST.

37
GST IMPACT ON OUR REGULAR FOOD BILL.

Even the regular items like tea/coffee will have an effect. Consumer drinking tea/coffee for Rs 5 these days will
now pay Rs 5.60 and this though being a small amount is going to pinch their pockets

38
 OVERVIEW OF IMPACT OF GST ON TOURISUM INDUSTRY

Tourism represents world’s third largest export avenue in terms of global earnings after fuel and chemicals.
Modern tourism is closely linked to socio- economic development. Tourism is responsible for one out of 11 jobs
and 10% of the world’s economic output. Apart from providing employment, income and foreign exchange for
the country, the trade in the tourism sector has an economically positive impact on other associated industries
such as food manufacturing, services, construction, agriculture, handicrafts etc. Hospitality is not only a high
foreign exchange grosser; it is also among the largest tax generators. There are multiple taxes charged on the
same Service/ Product offering by the Central as well as State Governments. It is an understanding that the
Taxes levied on Inbound Tourism is among st the highest in the country, and this is one of the major reasons for
India losing Foreign Tourists to competing South East Asian Countries. On the historic midnight of 30th June
2016, India’s PM Narendra Modi ushered the country into the age of GST – ‘One Nation One Tax’. Being an
impartial tax framework, the effects of GST can be seen across all domains. The Indian Tourism industry which
was valued at US$ 136.2 in 2016 has also faced the impact of GST. Endevour is placed in this article to
highlight the GST impact on travel and tourism industry in India

Tourism represents world’s third largest export avenue in terms of global earnings after fuel and chemicals.
Modern tourism is closely linked to socio- economic development. Tourism is responsible for one out of 11 jobs
and 10% of the world’s economic output. Apart from providing employment, income and foreign exchange for
the country, the trade in the tourism sector has an economically positive impact on other associated industries
such as food manufacturing, services, construction, agriculture, handicrafts etc Hospitality is not only a high
foreign exchange grosser, it is also among the largest tax generators. There are multiple taxes charged on the
same Service/ Product offering by the Central as well as State Governments. It is an understanding that the
Taxes levied on Inbound Tourism is among st the highest in the country, and this is one of the major reasons for
India losing Foreign Tourists to competing South East Asian Countrie

Tourism sector shall be impacted both positively and negatively under the GST regime. The multiple taxes
would be replaced by one single tax, the rate of which is likely to be between 16%- 18%. The sector may
benefit in the form of lower tax rates which should help in attracting more tourists in India.

39
 GST EFFECT ON RESTAURANT

The smaller outlets like food courts, dhabas, coffee bars cater to large segments of population on daily basis.
The maximum people who fall in this business category earn modest income and thus the new tax format is
likely to come under criticism. All kinds of hotels whether it is AC or non-AC will definitely collect the higher
rate and this will bring an overall price hike in food items.
According to the latest GST update budget, hotels that are charging Rs 1000 per day for rooms are exempted
from taxes. Hotels that are charging Rs 5000 or more room tariff per day will have to pay 28 per cent GST
which is a big threat to country’s developing tourism and hospitality. Restaurants in such hotels too, will have to
pay 28 per cent GST.

Under the current tax regime, restaurant business owners do not get any option to adjust the output service tax
liability with the credit of input VAT on goods consumed, hence restaurant owners are in no mood to cheer for
the GST bill.

Price hike in food can be expected in the upcoming days. If you are very fond of eating outside, you might now
need to check your pockets when you plan on it.

40
 GST EFFECT ON TOUSIUM INDUSTRY

Hospitality is not only a high foreign exchange grosser; it is also among the largest tax generators. There are
multiple taxes charged on the same Service/ Product offering by the Central as well as State Governments. It is
an understanding that the Taxes levied on Inbound Tourism is among st the highest in the country, and this is
one of the major reasons for India losing Foreign Tourists to competing South East Asian Countries. On the
historic midnight of 30th June 2016, India’s PM Narendra Modi ushered the country into the age of GST – ‘One
Nation One Tax’. Being an impartial tax framework, the effects of GST can be seen across all domains. The
Indian Tourism industry which was valued at US$ 136.2 in 2016 has also faced the impact of GST. Endevour is
placed in this article to highlight the GST impact on travel and tourism industry in India. India’s biggest tax
reform yet has been met with an equal measure of praise and criticism. While the implementation of the Goods
and Service Tax promises to add a significant edge to the economy, by reducing costs for customers, integrating
taxes, and reducing business transaction costs, it will also increase costs for businesses as well the burden of
compliance. The hospitality and tourism industry is one such sector in the economy that is deliberating over the
new tax regime. Hospitality is one of the most competitive and steadily growing industries in the country. The
tourism industry contributes nearly $136 billion to India’s GDP and is expected to further grow to US$ 280.5
billion by 2026. Hospitality and tourism are also among the highest employment generating sectors and among
the top 10 sectors in the country with the highest volume of foreign direct investment. In addition to being one
of the top sources of foreign exchange, tourism is also among the highest tax generating sectors in the country.

41
Hotel industry

The concept of shelter in India is not new. 20th century is turning point for hotel industry in India and many
business owners entered into the field. Hotel industry is a service oriented sector which offers many facilities/
services. On the bases of facilities provided by hotels they are categorized into different tax slabs under GST.
Hotel industry is one of the growing industry in service sector.Due to the growth in tourism and travel with
rising domestic and foreign tourist, hotel sector is continuously growing. The Indian hotel market worth
estimated around US$ 17 billion. Hotel industry contributes greatly to tourism and around 7.5% of national
GDP.

“GST shall be payable by taxable person on the supply of goods and services. Taxable person is defined in
section 9 of model GST law which stipulates that a person who carries on any business at any place in Indian
state and who is registered or required to be registered under schedule III of the Act”. Services provided by
hotel industry,
⮚ Serving of food and liquor
⮚ Room accommodation services
⮚ Rent a cab
⮚ Catering
⮚ Laundry services
⮚ Renting space for events, conference etc.
⮚ Business support service.
⮚ Beauty parlour.
⮚ Club and gymnasium services.
⮚ Telecommunication like Fax, WIFI, telephone.

Before GST, hotel industry was under different kinds of taxes like services tax, VAT, luxury tax and it was
creating complexity in accounting. Tax rate was not uniform as they were imposed by both state and central
government. But after July 1st 2017 all hotels and restaurants came under single tax system. Now entire India is
subjected to impose single tax rate irrespective of where they situated.

Section 2 deals with introduction of hotel industry. A commercial establishment providing lodging meals and
other guest services in general, hospitality minimum of six letting bedrooms, at least three of must have

42
attached private bathroom facilities. Although hotels are classified into „star‟ categories (1 star to 5 stars), there
is no method of assigning these ratings and compliance with customary requirements is voluntary.
A US hotel with certain rating may look differ from European or Asian with same rating and would provide a
different level of amenities, rate of facilities, and quality of service.
Star hotel provides good and spacious accommodation high-class decoration furnishings and color TV
better-equipped bedrooms each with a telephone and one or more bars or lounges with attached private
bathrooms.
Hotel industry plays a vital role in the development of services sector. Hospitality plays a major role in this
sector. Tourism and Hotel paves the way for development of exchange currency in India. Star hotels in various
places connected with tourism places.
People from various countries traveling throughout the world want to stay and enjoy the whole day. The Luxury
tax and combined service tax is 6 % fixed by different states.
After GST, highest rate is 28%, which is less expensive; and this GST is for star hotels only. Industry sources
said that the average combined tax rate is in the range of 18% to22%.Under the new GST if we stay in dinning
at five star is more expensive.
However budget hotels have been spared with room rates of less than Rs.1000/- is nil, Between (Rs.1000 to
Rs.2500) is 12%,(Rs2500 to Rs5000) is 18% and aboveRs.5000 is 28%.

43
TOURISUM INDUSTRY

On the historic midnight of 30th June 2016, India’s PM Narendra Modi ushered the country into the age of GST
– ‘One Nation One Tax’. Being an impartial tax framework, the effects of GST can be seen across all domains.
The Indian Tourism industry which was valued at US$ 136.2 in 2016 has also faced the impact of GST.
Endevour is placed in this article to highlight the GST impact on travel and tourism industry in India. India’s
biggest tax reform yet has been met with an equal measure of praise and criticism. While the implementation of
the Goods and Service Tax promises to add a significant edge to the economy, by reducing costs for customers,
integrating taxes, and reducing business transaction costs, it will also increase costs for businesses as well the
burden of compliance.

Tourism Oriented Products (TOP)

These are the products and services created primarily for the tourists and also for the locals. These products
need a great share of investments in private sector. A few of them are −

● Accommodations; For example, Taj, ITC Hotels.

● Transportation; For example, Owning taxis, luxury buses, and boats.

● Retail Travel Agents

● Tour Operators

● Shopping Centers such as malls

● Cinema Theatres such as PVR

● Restaurants for Food and Beverages

● Tourism Information Centers

● Souvenirs Outlets

● Museums, Temples, Gardens, and Theme parks

Residents Oriented Products (ROP)

Here, the products and services are created mainly for the local residents staying at a particular tourist
destination. This category requires investment in public sectors more. Some of them are −

44
 ● Hospitals

● Public Parks

● Banks and ATMs

● Petrol Pumps

● Postal Service

Intangible Products of Tourism

They include −

● Bookings of accommodations, theatres, and at various sites.

● Tourists’ experience by visiting a destination, eating at a restaurant, or performing an activity.

● Tourists’ memory which is created by storing the details of events and experience on the tour. The
high degree of satisfaction or dissatisfaction is often stored as a long term memory.

● Transportation of tourists and their luggage from one place to another.

Tour Operator’s Products and Services

To realize the facilities and experience a tourism product offers, service is required by skilled and qualified
staff. The tour operator provides the following typical products and services −

Accommodations

The tourist destinations are equipped with different types of accommodations. They cater for tourists’ stay at
the destination.

● Serviced − This type of accommodation is supported by skilled staff such as housekeepers, drivers,
guides, and cooks.

● Self-catering − This accommodation offers staying facilities but dining is required to be self-catered. It
is equipped with cooking, fuel and facility, some basic supplies such as tea/coffee/sugar sachets, and a
drinking water source.

● Hotels − Budget rooms to 7* hotels with classy amenities. The hotels contribute a major share of
imparting the experience to the tourists by providing best services and amenities.

45
 ● Guest Houses − Owned by business or government organizations, which can be used by its staff and
staff relatives.

● Camping Sites − They are open sites often located in areas of lush greenery. They are equipped with
clean place to pitch the personal tent, a water supply, and electric supply. Camp sites have common rest
rooms.

Reservations

The tour operator is responsible for making reservations for special events or activities the tourists are
interested in. At some places, the reservations are required to be done well in advance to avoid last minute
hassles. The events or activities such as a music concert or a theatre show, visiting a theme park or a zoo,
require people to secure seats or avail entry with prior reservations.

Guided Tours

The tour operators can arrange guided tours. Some qualified staff who can get access to the place, explain the
importance of the place, support, and guide the participants through the entire visit. The guide is arranged to
accompany the tour participants as a part of tour.

Transport Facilities

These facilities are for travelling from one place to another.

Surface Transport − It includes support of transport by road or water.

Air Transport − This is the support of transport by air, generally given for long distance travel. Many times
the tours include a halt of a couple of hours at transit destinations. Today the airports are built and maintained
as engaging tourist terminals by providing amenities such as spas, lounges, food joints, bars, and book shops,
retail shops for selling authentic local food, clothes, and souvenirs.

Today the Airlines are no more backstage when it comes to caring for their customers. They offer loyalty
programs to their customers under Frequent Flyer Program to encourage the customers to travel more and
accumulate points and redeem them against travel or rewards.

46
Tax rate under GST for hotels and restaurant.

⮚ Room accommodation: room rent less than 1000 is exempted from GST, rent from 1000 to 2500 is
at12%, rent from 2500 to 7500 at 18% and room rent more than 7500 at 28%.

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

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

⮚ or non-AC restaurant. Rent a cab: if fuel cost is borne by service provider at 5% and fuel cost is borne
by recipient at 18% is charged.

⮚ Business support services, laundry service, beauty parlour, gymnasium service, club facility charged
at18%

⮚ Rent premises for event and conference 18%

⮚ Tele communication facility 18%

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48
49
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51
 Introduction of Research Methodology:

This chapter furnishes a precise of the research methodology used in the research of the application of Goods
and Service Tax (GST) to the Impact of GST on Hotel and Tourisum industry.

Redman & Mory (2001) defined research as a systematic compaign to gain new cognition. In fact, research also
is said as an art of scientific investigation. The research methodology is the fashion to figure out the research
problem and to acquire the info systematically. It is based on the most effective fashion to obtain useful info
with a very minimum price to acquire the consequence of an investigation. Besides that, it may understand as a
scientific discipline of poring over how research is done scientifically.

The aim of this chapter is to discourse the method used in the research. It is also a vital component in order to
achieve the objective of the decision, clear, accurate and reliable. In this chapter also, we can see the step is
generally adapted to know how to collect analysis and interpretation of data. It covers the aspects of research
contrive, research process, population and sampling, data aggregation technique, development of instrument and
data analysis adopted. The purpose of this chapter are to describe the research methodology of this study,
explain the sample selection, describe the procedure used in designing the instrument and collecting the data,
and provide an explanation of the statistical procedure used to analyse the data. The questionnaire research
method has been chosen to determine the application and effect of Goods and Service tax(GST) to Impact of
GST on Hotel and Tourisum industry.

52
 RESEARCH DESIGN

Research design is defined as the logical and systematic approach in planning and directing a piece of research .
It is the overall plan of how the researcher intends to implement their projects in practice . It is also stated as the
arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the
research purpose in procedure. The purpose of research design is to insure that the evidence obtain enables us to
answer the initial objective clearly.

There are several types of research design and one of them is pre-experimental designs. The pre-experimental
design have three common designs that is one-short case study, one group protest to the post test design and
intact group comparison.

This research is flowing one short case study design. It depends one group is treatment and only one
observation is done. The one short case study means one group is exposed to the treatment, and only post test
is given to the observation ormeasure the effect of the treatment on the dependent variable within the
experimental group. Since it is applied on a single group, there is no control group involved in this design. In
this study, the independent variables are General Insurance company such as insurer, customer and agents
while dependent variables is goods and service tax (GST) which is affected by independent variables, and to
make sure there is any correlation relationship between independent and dependent variables.

53
 DATA COLLECTION METHOD

Data is one of the vital aspects of any research studies. Every research is based on the data which is analysed
and interpreted to get information. There are two sources of data. Primary data collection applies surveys,
questionnaires, experiments or direct observations, secondary data collection may be conducted by collecting
information from a diverse source of documents or electronically stored information. In this research paper,
two data collection will be used which is primary data secondary data collection.

PRIMARY DATA

Primary data are the data which are accumulated from the field under the control and superintendence of an
investigator. Primary data means original data that have been collected specially for the purpose in the mind.
This type of data is generally a fresh and collected for the first time. It is useful for current studies as well as for
further studies. The collection data tool that has been chosen in this study is questionnaire. Most of the previous
researcher use the questionnaire as their data collection tool in the survey. The collections of answer will

54
gain through the questionnaire that had been answered by the insurer, customer and also the owners of the
hotels in lonavla.

The questionnaire was administered to a random company through google form and email to the company. The
used to questionnaire in this study does not meddle to the daily routine at the respondent’s since it took them
only several minutes to answer the questionnaire. A questionnaire has a list of enquiries whether in an open
ended or close ended for which respondents will give an answer according to their cognition. For this survey the
questionnaire using close ended question format, in which case the respondent is asked to select an answer from
among a list provided and fill in the answer on the response scale provided.

SECONDARY DATA

Secondary data are the data that have been already collected by and readily available from other sources. Such
data are cheaper and more quickly obtainable than the primary data and also may be available when primary
data can not be obtained at all. The researcher will find the secondary data when it is not possible to collect the
primary data. We can acquire secondary data based on the research that can be gained after go through certain
sources such as indicated source that have been printed or not. Basically, secondary data provide the research to
understand more about the topic and give clear view and prespective to your current study.

Secondary data collected through various sources such as internet i.e.google.com, newspapers and also GST
books

55
 SCOPE OF THE STUDY :

GST shall cover all goods and services, except alcoholic liquor for human consumption, for the levy of
goods and services tax. In case of petroleum and petroleum products, it has been provided that these goods
shall not be subject to the levy of Goods and Services Tax till a date notified on the recommendation of the
Goods and Services Tax Council.

Promulgation of GST Council: Proposed Article 279A of the Bill provides for constitution of Goods and
Services Tax Council to examine issues relating to goods and services tax and make recommendations to the
Union and the States on parameters like rates, exemption list and threshold limits. The Council shall function
under the Chairmanship of the Union Finance Minister and will have the State Union Minister as its
members.

● All goods and services are covered under GST Regime except Alcoholic liquor for Human
Consumption,
● Tobacco Products subject to levy of GST and Centre may also levy excise duty
● GST Council yet to decide the incidence and levy of GST on following;
o a)Crude Petroleum
o b)High Speed Diesel (HSD)
o c)Motor Spirit (Petrol)
o d)Natural Gas
o e)Aviation Turbine Fuel

56
● SAMPLING:
● My working area was a part of Panvel, Navi Mumbai. I have collected my data From restaurant within
Panvel. As we know that the person who engaged in restaurant sector who will be salaried or Owners. I
have targeted the team who engaged in GST i.e. tax department and persons who had impact on GST.
● Sampling unit:
● My sampling unit included the persons who engaged in restaurant sector. Such as owner of restaurant.
● Size of sampling:
● Number of people surveyed. The sample consist branch owner, employees and customers from 10
Restaurant.
● Sampling procedure:
● Data were collected using the personal contact approach. I talked to 10 restaurants Owner. I met several
employees and Owner who immediately identified with the concern expressed questionnaire is
distributed the information about GST application in their firm.

57
 Limitation of the study:

Due to time constraints, the study period is limited to only 2 Month. Hence not able to collect much more

information regarding hotel industry.

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

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

OBJECTIVES OF THE STUDY:

⮚ To reduce the complications in tax administration and compliances.

⮚ To create awareness among people who engaged in Restaurant Sector.

⮚ To cognize the concept of GST on Restaurant.

⮚ To study features of GST and Restaurant.

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

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

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 HYPOTHESIS:

The word hypothesis is derived from the greek hypo (under) and tithenas (to place) and suggests that when the
hypothesis is placed under the evidence as a foundation they tend to support one another. It provides a proposed
explanation which may be confirmed or refuted by testing. A hypotheses is a suggested answer to the problem.

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

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

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.

60
 Literature Review

The proposed GST is likely to change the whole scenario of current indirect tax system. It is considered as
biggest tax reform since 1947. Currently, in India complicated indirect tax system is followed with
imbrication of taxes imposed by unions and states separately. GST will unify all the indirect taxes under as
umbrella and will create a smooth national market. Expert says that GST will help the economy to grow in
more efficient manner by improving the tax collection is it will disrupt all the tax barriers between states and
integrate country by single tax rate.

GST was first introduced by France in 1954 and now it is followed by 140 countries . Most of the countries
followed unified GST while some countries like Brazil , Canada follow a dual GST system where tax
imposed by central and state both. In India also dual system of GST is proposed including CGST and SGST.

● Vineet Chauhan (2017)

Conduct a study on “ Measuring Awareness about implementation of GST.” A study survey of small business
unit of Rajasthan State in India. The study seeks to evaluate the awareness of the business owners about GST
difficulties they face to encase of the current awareness about it. 148 small business owners were analyses in
order to identify the awareness about GST from Rajasthan state and the kind and extent of relief provided and
the implementation of the provision under GST Law.
● Poonam (2017)
The biggest problems in Indian tax system like Cascading effect & tax evasion, distortion can be minimized by
implementing GST. After amalgamation of local state and central taxes competitiveness of industry, exporter
and company will increase. The extra revenue which can be generated from broaden tax base structure can be
utilized for the growth of nation. In economy tax polices play an important role because of their impact on
efficiency and equity. Indirect tax reforms have been as integral part of the liberalization process since new
economic reforms.

Times of India (26 July 2017)

page no 1&17 it is stated that Sweet makers are confused with fixing the tax for their products as the
ingredients used in the sweets are taxed separately as raw material and as finished goods the products its taxing
is different ex. Plain burfi is 5% taxed but chocolate burfi is fixed with 28%. Plain burfi mixed with other dry
fruits is of 12%. This taxing system makes the Sweet makers to get confused on how much GST to be fixed for
which product.

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● Times of India(27 July 2017)
Stated that the GST implication across different places for the same product has wider differences which the
consumers are unaware, resulting them in surprise. Ex A Rasamalai sold in counter at a shop is taxed with 5%
but if it is served in the hotel it is taxed with 18% this has resulted in difference of consumers shopping to
purchase the similar products

Dr. G Gabriel Prabhu:

GST is here, and businesses are still trying to understand the changes required in their current systems to
accommodate the new compliance model. On this note, we bring you our impact analysis on something which
is very near and dear to us; or, rather to our stomachs –the restaurant and food industry. Here we will try to
explain how the restaurant bill will look under GST and what are its implications for the end consumers the
owners and the overall industry.

Dr.Manjunath and et. Al (2016) : “Customer satisfaction in Fast food industry” . The objective of the study is
to find out the key success factors for fast food industry in region of mysore district and its aim is to find out the
essential factors or determinants of customer satisfaction in the restaurant industry of mysore district. The
findings revealed that the service quality and physical design are the key factors for satisfaction in fast food
industry in my sore district.

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

The objective of the study is to how the restaurant bill will look under GST , and what are the implications for
the end consumers for the owner and the overall industry. The findings revealed that hotels are liable for GST of
28% (14% CGST+14% SGST) as against the effective tax of 21% under present indirect tax regime.

Dash .A Volume 3 Issue 5 May 2017, “ positive and negative impact of GST on Indian economy”. The
objective of the study is to cognize the concept of GST , to study the features of GST , to furnish information
for further research work on GST, to evaluate the advantages and challenges of GST . Credits of input taxes
paid at each stage will be available in the subsequent stage of value addition which makes GST essentially a tax
only on value addition at each stage.

Alka Shah (2nd Nov 2017) “Integrated Goods and services tax an Indian innovation” .The objective of the
study is to cross utilisation of credit is to be done and adjustments to be made between centre and states. The
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paper mainly focuses on the key provisions for determining place of supply of Goods/services and nature of
supply i.e interstate or intra -state.

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Organization: 10 Hotels in lonavala
1. Is this your first Business related to Restaurant sector?
(a) Yes
(b) No

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

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

Interpretation:
70% of owners are enjoy their work which can they do, rest 25% said may be they enjoy their work that means
they said if conditions are satisfied according to them then they enjoy their work otherwise not and remaining
5% are not enjoy their work because of unsatisfied targets.

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

Interpretation:
75% of the owner’s satisfied with GST applying in their organization, rest 15% are not satisfied with GST and
remaining 10% said that may be they were satisfied.

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

Interpretation:
20% of the owners are highly satisfied with GST, 60% of the owners are satisfied with GST, rest 15% are
neutrally satisfied with GST and remaining 5% are not satisfied with GST.

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

Interpretation:
50% of owners said that their restaurant received benefit after applying GST, rest 30% of restaurant said that
their restaurant are not received any benefits and remaining 20% said their restaurant may be received benefits
after applying GST.

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

Interpretation:
44% of owners had stress because of applying GST, 16% of owners not have stress because of GST, rest 32% of
owners may be have stress and remaining 8% can’t say anything about that.

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7. Is application of GST positively influence on your restaurant’s performance in the market?
(a) Yes
(b) No
(c) May be
(d) Can’t say

Interpretation:
90% of the owners said that GST is positively influence on their restaurant’s performance in the market, rest 5%
said GST is not positively influence on their restaurant’s performance and remaining 5% said may be GST
positively influence on their restaurant’s performance.

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8. Is your working environment is safe because of applying GST?
(a) Yes
(b) No
(c) May be
(d) Can’t say

Interpretation:
There are 85% of the owners said that their working conditions are safe because of applying GST, rest 5% of
owners said may be their conditions are safe and remaining 10% of owners can’t say anything about that.

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12. How would GST impact the restaurant selling alcoholic beverages?
(a) GOOD
(b) BAD
(c) CAN’T SAY

Interpretation:
There are 59% of the owners said that GST impact good for selling alcohol beverage and 24% said its Bad
impact of selling alcohol beverage 17 % of owners can’t say anything about that.

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 CONCLUSION

After the all above the information it’s proved that null hypothesis (H1) is going to be rejected & (HO) the main
hypothesis is to be proved that is it totally right after conducting a research on the study of impact of GST on
hotel industry

SUGGESTIONS

1.) Customer-slab rate policy have to take initiative by the government of India to cut the income level
differences among the low middle-class and low income group.
2.) As the hotels comprising of Non A/c compartments, the hotel have to fix a moderate rate of GST as it suits
the income needs of low-middle class and low income people
3.) The Allowances on GST rates in small-sized and moderate hotels as it encourages the low-income and
middle class people.
4.) In point of GST in hotel, especially for the alcoholic products like liquor should be taxed at the highest slab
rate compared to the current 18% GST rate on A/c restaurants.
5.) Reduce the cost of the food and beverage it encourages the low –income and middle class people.

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 References:
1) GST E- Book From www.GST.com.

2) www.gst.com

3) www.google.com

4) www.GST in india.com

5)Hotel and tourisum industry website.

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 QUESTIONNAIRE

Personal details:

NAME OF THE HOTEL:

Name:- Contact No:

Add:-

1. Is this your first Business related to Restaurant sector?

(a) Yes (b) No

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

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

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

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

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

5. Have your hotel received benefits after GST application?

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

6. Is you have stress because of applying GST?

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

7. Is your organization can provide awareness to your customers about GST application on hotel
industry?
(a) Yes (b) No (d) Can’t say

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

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(a) Good (b) Bad (c) Can’t say

9. Has your customers replied positively about GST application?

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

10. Is application of GST positively influence on your restaurant’s performance in the market?
(a) Yes (b) No (c) May be
(d) Can’t say

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

(a) Yes (b) No (c) May be
(d) Can’t say
12. How would GST impact the restaurant selling alcoholic beverages?
(a) Good (b) Bad (c) Can’t say

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