A PROJECT REPORT

ON

IMPACT OF GST AT SWAGATH

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

MASTER OF BUSINESS ADMINISTRATION

{2021-2023}
BY

MANGALI RAKESH
H.T.NO: 4502-21-672-051
UNDER THE GUIDANCE OF

Dr. KIRANMAI KATTA

DEPARTMENT OF BUSINESS MANAGEMENT STUDIES

UNIVERSITY COLLEGE OF COMMERCE & BUSINESS MANAGEMENT

MAHATAMA GANDHI UNIVERSITY

NALGONDA – 508254
 DEPARTMENT OF BUSINESS MANAGEMENT STUDIES
MAHATAMA GANDHI UNIVERSITY, NALGOND
CERTIFICATE

This is to certify that the project report on IMPACT OF GST AT SWAGATH carried
out by MANGALI RAKESH, H.T.NO: 4502-21-672-051, during the academic year
2021-2023 has been completed and submitted under my guidance in partial
fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION.

The project report submitted to Department of Business Management

studies, University College of Commerce & Business management, Mahatma
Gandhi University, Nalgonda. This has not been to any other university or institute
for the award of degree.

PROJECT SUPERVISOR HEAD OF THE DEPARTMENT

EXTERNAL EXAMINER
 ACKNOWLEDEMENT

I take this opportunity to extend my profound thanks and deep sense of gratitude
to the authorities of SWAGATH GRAND for giving me the opportunity to undertake
this project works in their esteemed organization.

My sincere thanks to Honorable Project supervisor Dr. KIRANMAI KATTA, Head of

The Department Dr. M. VENKAT RAMANA REDDY, for the kind encouragement and
constant support extended in completion of this project work from the bottom of
my heart.

I am also thankful to all those who have incidentally helped me, through their
valued guidance, co-operation during the course of my project.

MANGALI RAKESH

H.T.NO: 4502-21-672-051
 DECLARATION

This is MANGALI RAKESH here by certify that the project report entitled
IMPACT OF GST is submitted in partial fulfillment of MASTER OF BUSINESS
ADMINISTRATION

This is a record of Bonafide work carried out by me under the

guidance of Dr. KIRANMAI KATTA, University College of Commerce & Business
Management, Mahatma Gandhi University, Nalgonda. The results embodied in
this project report has not been reproduced or copied from any source. The
results embodied in this project report have not been submitted to any other
university or institute for the award of any other degree or diploma.

MANGALI RAKESH

H.T.NO: 4502-21-672-051
ABSTRACT

This study aims to find out the influence of GST on Hotel Industry at Hyderabad city. The
study was chosen five independent variables to identify the opinion of respondents on the
implementation of GST namely GST is effective, easy to understand, taxation condition, profit
margin and customer increase after GST. The study was empirical in nature. The study collectes
data from Swagath group of hotels by using structured scheduled interview method.Secondary
data was collected from books, magazines and from websites. The samplingtechnique
adopted for the study was disproportionate stratified random sampling method. The analysis
such as descriptive statistics and multiple regression analysis are applied. The study found that
there is a significant certain impact of GST implementation on hotel industry at Hyderabad
city. The study concluded that GST in hotel industry will attract more customersto consume
hotel service and also enhances revenues to the government.

1
 INDEX
S. No CHAPTER Page No
LIST OF TABLES
LIST OF GRAPHS
1 CHAPTER - I 01-09
INTRODUCTION
NEED OF THE STUDY
SCOPE OF THE STUDY
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
2 CHAPTER - II 10-30
REREVIEW OF LITERATURE
THERTICAL FRAME WORK
3 CHAPTER - III 31-44
INDUSTRY PROFILE
COMPANY PROFILE
4 CHAPTER - IV 45-59
DATA ANALYSIS &INTERPRATATION
5 CHAPTER - V 60-61
FINDINGS
CONCLUSION
SUGGESTIONS
QUESTIONNAIRE 62
BIBILOGRAPH 63-65

2
 CHAPTER – I

INTRODUCTION

3
1.1. INTRODUCTION

Goods and Services Tax (GST) is an indirect tax levied at national level and it nullifies all
indirect taxes. It is a comprehensive tax levied on sale, manufacturing and consumption of
goods and services. Regime of GST was started by Vishwanath Prathap Singh in 1986 during
Rajiv Gandhi government but it failed to get approval in the Lok Sabha. Finally, GST Act was
passed on 29th march 2017 and it came into force on 1st July 2017. Rules regulation and rates
governed by GST council comprise all state and central finance ministries.

“One tax for entire nation”: A good advantage of GST is that tax on tax is removed and the
cost of goods decreased. The whole concept of GST for levying tax is based on 5 slabs 0%,
5%, 12%, 18% and 28%. GST removed the cascading effect (tax on tax) on the sale of goods
and services which helps to decrease the cost of goods and services. Activities like returns,
refund registration response need to be done on the GST portal. This helps to speed up GST
process. The 3 types of GST are, CGST: collected by central government on intra-state sale.
SGST: collected by state government on intra state sale and IGST.

The hotel industry spends a lot of money on construction and renovation works. They have to
move with the times in order to remain competitive and to attract more and more customers.
The money paid as taxes on the construction activities cannot be used as input credit to set off
the taxes paid on the services offered by the hotels and restaurants. The R&D cess which is
applicable on technical know- how fees and franchise agreements in the industry is likely to
become a part and parcel of GST. The restaurant industry has been burdened with high and
multiple taxations. However, it is felt that liquor should be included in GST. Exempting it
defeats the very purpose of bringing in a uniform single tax structure.

This allows the states to have their own taxes without a cap with separate accounting
requirements and results in double compliance for the restaurant / hotel industry. This is neither
beneficial for 'Ease of doing business' nor for the customers.

"Everybody likes consolidation of taxes as it leads to greater transparency and will help
guests and buyers understand the overall costs. We welcome the development," said Raj Rana,
CEO, South Asia, for hotel group Carlson Rezidor. "Some states have luxury tax and that
impacts room rates. If India aspires to be competitive, then the tax structures too need to be
competitive." opined Rashi.

4
 The Impact of GST on the Pricing of Hotel Room Tariffs in India

Regarding the impact of Goods and Service Tax on the Pricing of Hotel Room Tariffs in India,
the prevailing GST Rates on Hotels Room Tariffs are presented in the following table.

Table 1: GST Rates on Hotels Room Tariffs

S. No Tariff Per Night GST Rates

1 Less Than Rs.1000 No Tax (0%)
2 Between Rs.1000- Rs.2499 12%
3 Between Rs. 2500-Rs.7499 18%
4 More Than Rs.7500 28%
The above table 1 shows that the Under the GST regime, hotels and the restaurants are charged
separately. Hotels will be charged with different rates depending on the value of tariff they are
going to charge per night. Hotels with tariff less than Rs.1000 will not charge any GST. But
hotels with more than Rs.1000 tariff and less than Rs.2500 per night are subject to charge
GST at 12%. Hotels having tariffs between Rs.2500 and Rs. 7500 per night are subject to charge
GST at 18%. Whereas five-star category hotels with tariffs more thanRs. 7500 per night are
liable to charge GST at 28%.

The Impact of GST on Food Services & Restaurant Business in India

GST will subsume the service tax and VAT into one single rate, but catering bills are expected
to include service charges along with GST. Detailed GST rates applicable to different types of
Restaurants are shown in Table No 2

Table 2: GST Rates on Eating Out

Restaurant Serving/ Not Serving

Service Tax VAT GST Rate
Type Alcohol
Non –Air Not Serving Alcohol 5%
Conditioned Not Serving Alcohol 5%
Air Conditioned Serving Alcohol 5%
6% (60% Not Servicing Alcohol 5%
Partly AC & Abatement, pay 14.50% Serving Alcohol 5%
only 40%)
Partly Non-AC Not Servicing Alcohol 5%
5 Star Restaurant Serving Alcohol 5%
All 5%

5
The GST council has introduced rates applicable for various types of restaurants. Eating at a
Non-AC restaurant not serving alcohol will be charged at 5% GST. Apart from it all restaurants,
whether it be partly Air conditioned and partly non-Air conditioned, serving alcohol or not,
completely Air conditioned, serving alcohol or not, including eating at luxury and five-star
hotels will be charged GST at 5%. Food Truck businesses will not be affected by the
implementation of the GST. Therefore, it is expected that such cateres will grow drastically in
the near future.

1.2. NEED FOR THE STUDY:

VAT rates and regulations differ from state to state. And it has been observed that states often
resort to slashing these rates for attracting investors. This results in loss of revenue for both the
Central as well as State government.

On the other hand, GST brings in uniform tax laws across all the states spanning across diverse
industries. Here, the taxes would be divided between the Central and State government based
on a predefined and pre-approved formula. In addition, it would become much easier to offer
services and goods uniformly across the nation, since there won’t be any additional state-levied
tax.

GST rollout missed several deadlines due to disagreement among many states over certain
important issues on the new tax reform. However, as per recent reports, GST is scheduled for
a nation-wide rollout on April 1, 2016.

1.3. SCOPE OF THE STUDY:

This study is conducted to find out the views of consumers in Hyderabad and to know about
their expenditure pattern and the variation. The respondents selected are of mixed group which
will give wider difference in understanding. The scope of the study is limited only to the
concerned area of study which cannot be justified for any other place.

6
1.4. OBJECTIVES OF THE STUDY
• This study has the following objectives:
• To analyze the impact of GST on the pricing of Hotel room tariffs.
• To examine the impact of GST on restaurant food bills.
• To examine the impact of GST on restaurant owners purchase bills.
• To understand the Pros and Cons of GST on the Indian hospitality and tourism
industry.

1.5 RESEARCH METHODOLOGY:

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.

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

7
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 gain
through the questionnaire that had been answered by the insurer, customer and also the owners
of the hotels in Hyderabad.

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.

8
Secondary data collected through various sources such as internet i.e.google.com, newspapers
and also GST books which refers by chartered accountants CA.

SAMPLING:

My working area was a part of Hyderabad, Telangana. I have collected my data From restaurant
within Hyderabad and Rangareddy. As we know that the person who engaged in restaurant
sector who will be salaried or Owners. I have targeted the team who engaged in GST i.e. tax
department and persons who had impact on GST.

Sampling unit:

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

Size of sampling:

Number of people surveyed. The sample consist branch owner, employees and customers from
10 Restaurant.

Sampling procedure:

Data were collected using the personal contact approach. I talked to 10 restaurants Owner. I
met several employees and Owner who immediately identified with the concern expressed
questionnaire is distributed the information about GST application in their firm.

Tools and techniques:

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

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

9
customers response, etc.

Period of study: The time period of the study is 45 days.

1.6. LIMITATIONS OF THE STUDY

Due to time constraints, the study period is limited to only 45 days. Hence not able to collect
much more information regarding hotel industry.

The area of study is limited to Hyderabad and Rangareddy. 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.

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 CHAPTER – II
REVIEW OF LITERATURE

11
1.8. REVIEW OF LITERATURE
ARTICLE: 1
TITLE: IMPACT OF GST ON HOTEL INDUSTRY

AUTHOR: Dr. Davendra Kumar Sharma

ABSTRACT: GST is an Indirect Tax which has replaced many Indirect Taxes in India. The
Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came
into effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi -
stage, destination - based tax that is levied on every value addition. In simple words, Goods
and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law
has replaced many indirect tax laws that previously existed in India. GST is one indirect tax
for the entire country. Many studies has been done on the topic on GST and its impact on
various sector. The present study is based both Primary and secondary data. Primary data has
been collected directly from hotel and bill of customers, secondary data obtained from hotel
Arya Niwas which stood three star status by the government of Rajasthan. The study shows
the descriptive and analytical vision. The study shows impact of GST on hotel industry and
their stakeholders.

Keywords-- impact of GST on hotel industry

ARTICLE 2:
TITLE: Effect of GST in Hotel Industry (Nagpur)
AUTHORS: Akshay R. Rakhunde, Dr. Priti Rai
ABSTRACT: India is world most attractive tourism spot. India have many states. India have
different cultures of every states and have various variety in the food. Due to this domestic
and international tourist are going to the India’s various states for enjoyment. However, Indian
government cannot be do much effort to attract the tourist and grow the tourism. Dueto that
burden of taxes can remove, government of India established new taxation condition, that is
good and service tax (GST). In 1 July 2017 government of India can pass the bill in parliament
of India to establish the GST. In India every states have their own law for tax conditions. But
because of GST, various taxes of the states government will be finished. That taxes is burden
for the people, however, because of GST the inflation in the price of tourism will be studied. In
that study we can observed truism will be increase or decrees after GST in reality and numbers.

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ARTICLE – 3

TITLE : IMPACT OF GST ON INDIAN HOTEL AND RESTAURANT BUSINESS

AUTHORS : Dr. S.K.Khatik, Dr. Amit Kumar Nag

JOURNAL NAME : International Journal of Management, IT & Engineering, Vol. 9 Issue 3,

March 2019, ISSN: 2249-0558

ABSTRACT : A 32 years old dream to have indirect tax reform finally comes true on July 1,
2017. The process of indirect tax reform started in the year 1986 with the introduction of
Modified value added tax (MODVAT), followed by the proposal to have a single tax system in
the form of Goods and Services Tax for the country as a whole in 1999 was finally introduced
on July 1, 2017. Goods and services tax is a non-discriminatory indirect tax and is applicable
throughout the country. The present research work attempts to highlight the impact of Goods
and services tax on Indian Hospitality and Tourism Industry. The industry with a contribution
of around US$ 136200 million1 to the GDP at the end of 2016 is the one whichis expected to
witness major changes post GST. The present research paper will cover impact of GST on the
pricing of Hotel room tariff, on restaurant food bills, on restaurant owners purchase bills as well
as its Pros and Cons on the Indian hospitality and tourism industry as a whole.

Keywords: Goods and Services Tax, Service Tax, VAT, Krishi Kalyan Cess (KKC), Swatch
Bharat-cess (SBC) & Input Tax Credit (ITC).

ARTICLE – 4

TITLE: Impact of Goods and Service Tax (GST) On Hotel Industry in India

AUTHORS: MISS. P.VARALAKSHMI, PROF. K.SANTHA KUMARI

JOURNAL NAME: International Journal of Research in Humanities & Soc. Sciences, Vol. 9,
Issue: 5, May: 2021, ISSN:(P) 2347-5404 ISSN:(O)2320 771X

ABSTRACT: Athithi devo bhavha” (Guest is God) has been one of the central tenets of Indian
culture since times immemorial. Today, hospitality sector (which includes tourism also) is one
of the fastest growing sectors in India and grew at the rate of 8 per cent between 2007 and
2016. The boom in travel and tourism has led to the further development of

13
hospitality industry. Consequently the hospitality industry is expanding globally and promoting
its growth in a changing multicultural environment. Hotels contribute to the outputof goods and
related services which build the well-being of their nations and communities. India is worlds
most attractive tourism spot. India has different cultures among which have varieties of food.
Attracted by these varieties of foods domestic and international tourists aspire to visit. In order
to make use of this attraction of the national and international tourists, and also stream-line the
tax system, Government of India initiated the Goods and Services Tax bill in the Parliament on
1st July 2017.This introduction of GST affected the different taxes levied by the State
governments of the respectors tourist places. To study whether the GST system has increased
or decreased the burden on hotel managements as wellas the tourists, the present study has been
taken up.

Keywords: Goods and Service Tax, Impact, Hotels, Contribute, Tourist, Development

ARTICLE – 5
TITLE: AN EMPIRICAL STUDY ON IMPACT OF GST ON HOTEL INDUSTRY AT
CHENNAI CITY

AUTHORS: Dr. M. Subha Priya, Dr. M. Premkumar

JOURNAL NAME: JETIR, February 2020, Volume 7, Issue 2 www.jetir.org (ISSN-2349-

5162)

ABSTRACT: This study aims to find out the influence of GST on Hotel Industry at Chennai
city. The study was chosen five independent variables to identify the opinion of respondents
on the implementation of GST namely GST is effective, easy to understand, taxation condition,
profit margin and customer increase after GST. The study was empirical in nature. The study
collectes data from 50 hotels (20 from 3 star, 20 from 4 star and 10 from 5star hotels) by using
structured scheduled interview method. Secondary data was collected from books, magazines
and from websites. The sampling technique adopted for the study was disproportionate
stratified random sampling method. The analysis such as descriptive statistics and multiple
regression analysis are applied. The study found that there is a significant certain impact of
GST implementation on hotel industry at Chennai city. Thestudy concluded that GST in
hotel industry will attract more customers to consume hotel service and also enhances revenues
to the government.

14
 THEORETICAL FRAMEWORK

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 come 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.

History of GST in India - Detailed Events:

The detailed events according to various timelines for GST implementation in India isgranted
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

15
 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

• 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 be1 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,
computerized commercial taxes in states. Following this, the implementation of GST
was pushed by one year.

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• 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.

• 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

17
 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.

• 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 Honorable 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

18
adopt the Goods and Services Tax (GST) on July 1, finally joined the GST

About Goods and Services Tax Network (GSTN):

"Goods and Services Tax" Network (GSTN) is a non-profit organization, 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)

GST Council meeting:

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

19
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 andrefund
procedure on the portal.

GST Rates rationalized:

• 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.
• 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 Pradhan Mantri Jan Dhan Yojana has been
exemptedfrom 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:

• To slash GST rate from the existing 12% to 8%, in order to bring it at par with

20
 the affordable housing with ITC claim option

• 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

analyzing 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 rationalize 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

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

GST Registration:

Basic exemption limit for suppliers of goods will be increased from Rs 20 lakhs to Rs 40 lakhs.
However, this limit remains Rs 20 lakhs for suppliers of services. For the special category
States, the limit for registration is currently at Rs 10 lakhs. This limit in case of supply of goods
is increased up to Rs 20 lakhs and such States have been given an option to either choose Rs
40 lakhs or Rs 20 lakhs threshold limit in a week’s time.

New Composition scheme for Services providers:

Those suppliers rendering either independent services or providing a mixed supply of goods
& services with a turnover of up to Rs 50 lakhs P.a in the preceding financial year, can join this
scheme. The Tax rate is fixed at 6% (3% CGST +3% SGST).

Changes to existing Composition scheme:

• Increase in the limit to opt into the scheme will be increased up to Rs 1.5 crore effective
from 1st April 2019.
• Tax to be paid Quarterly and GST Returns to be filed annually.

21
Consensus received for charging calamity cess in Telangana:

Telangana has been given an approval to charge Disaster/calamity cess of up to 1% on all the
intra-state supplies of goods and services within Telangana, for up to two years

GST Rate cuts:

• No changes in GST Rates until Revenue spikes, recommended by the GST council

• No GST rate cut on sale of under construction flats. Instead, a 7member group of
ministers is formed to study the implications of reducing the rates from 12% to 5% on
supply of such under construction properties.

• Further, No GST rate cuts on the Private lottery distributions. A Group of ministers will
be formed with representatives from developing and selling states

Expectations from the 32nd GST Council Meeting:

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

• To deliberate whether or not the tax rates on Lotteries must be 12% or 28% GST Slab
for private schemes respectively.

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

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

22
been a serious point of consideration by many Council members for quite some time.

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

The 33rd GST Council meeting came to an end after heavy theatrics. The Council was initially
supposed to meet on the 20th Feb 2019 via video conferencing but was later deferred to 24th
Feb 2019 to meet at Delhi, post the refusal by some state FMs. With the general elections
around the corner, it was highly speculated that the meeting would be politically driven.

The sops announced by the GST Council will boost the real estate selling henceforth and
monitor one of the most unregulated sectors in India, by ensuring that the rate cut benefits are
passed on to the neo and middle-class home buyers.

The agenda of the 33rd GST Council meeting covered ‘Under-Construction Housing’ sector
and ‘Private Lottery Distribution’.

Meeting concludes:

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

Meeting adjourned from 20th Feb to 24th Feb 2019:

The 33rd GST Council meeting was to be held on 20th February 2019 via Video Conferencing.
However, it was adjourned to 24th February 2019(Sunday), with no conclusivedecision taken.

The GST Council met on 20th February 2019 for a brief time to start with the discussions on
real estate. However, considering that a meet via video conferencing cannot support the
detailed discussion on issue crucial such as real estate taxation, the meeting was adjourned. No
discussions were initiated on Lottery.

The GST Council also extended the GSTR-3B Due date for the month of January 2019 by
two days to 22nd February 2019.

It is chaired by the Finance Minister ArunJaitley. This will be the 33rd GST Council meeting

23
and the first one after the Interim Budget 2019.

GST Council Meeting Expectations:

Reduce GST on under-construction homes:

Proposal placed before the council to reduce the rates for under-construction homes. It has been
proposed to reduce to 5% from 12% and to 3% from 8% in the case of affordable housing. In
both cases, the Input Tax Credit (ITC) will not be available.

One of the primary issues that builders currently face is that the balance ITC remains un-utilized
due to the high tax rate on cement and other raw materials. ITC is more when compared to tax
liability. Hence, there attracts a need for applying GST refund -a process which is yet to
stabilize.

GST Rate slashes on Cement from 28% to 18%:

One of the much-asked demands of the industry is to cut the GST Rate charged the sale of
Cement.

Cement is the basic raw material in the construction sector and a necessity for building
homes. It is supposedly positioned at the 5th- to be an essential material accounting for the
construction costs in India. Therefore, the issue on taxability of Cement garnered GST
Council’s attention after multiple requests of the Cement Manufacturers Association India.

Duty drawback like scheme under GST:

Compensation for taxes other than the basic customs duty (BCD) is not given to the exporters
under the GST regime. Accordingly, it affects their competitiveness. GST Officials involved
in the exercise confirmed that the duty drawback scheme is being prepared after a requisition
letter from the Directorate General of Foreign Trade (DGFT) to the Central Board of Indirect
Taxes & Customs seeking such relief.

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.

24
 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 center.

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:

• Central Excise Duty (including additional Duties of Excise)

• Service Tax.
• CVD (levied on imports in lieu of Excise Duty)
• SACD (levied on imports in lieu of VAT)
• Central Sales Tax (CST)
• Excise Duty levied on Medicinal & Toiletries preparations.
• Surcharges and cesses.
• State taxes that would be subsumed within GST are:

• VAT/ Sales Tax

• Entertainment Tax
• Luxury Tax
• Taxes on Lottery, betting and gambling.
• Surcharges & Cesses.

vii. GST would apply to all goods & services except Alcohol for human consumption,
Electricity and Real Estate.
viii. 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.
ix. The credit would be permitted to be utilised in the following manner:
• ITC of CGST allowed for payment of CGST & IGST in that order.
• ITC of SGST allowed for payment of SGST & IGST in that order.
• ITC of IGST allowed for payment of IGST, CGST & SGST in that order

25
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.

26
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 tothe
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 goingto pay with
GST.

27
GST IMPACT ON OUR REGULAR FOOD BILL.

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

GST BIFURCATION AS PER RESTAURANT

Dhabas & Small Restaurants – 5%

Non- Ac Restaurants – 12%

AC Restaurants – 18%

Five Star Restaurants – 28%

Considering the standard rate of 18% of GST, every restaurant bill payer can save around Rs.
55 on the bill of Rs. 2,200. If we see the effective rate of tax under current system, it ends up

28
to around 20.5%, which will come down to 18% with the GST effect.

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.

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,

29
 • 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 attached private bathroom facilities. Although hotelsare 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.

30
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%.

Impact of GST On hotel sector.

• Multiple taxes is replaced by single tax, therefore lower tax rate helps in attracting
more tourists in India.
• Centralised registration is compulsory in each state where they providing hotel facility
on own account or through agency.
• Provision for GST audit if the total turnover is more than prescribed limit.
• Hotel and restaurant has to make appropriate policy on discount offers and policies in
advance, it shall be a part of documentation.
• Every receipts/ invoice inward and outward supplies have to be uploaded in the system.
• Alcohol and electricity are out of the preview of GST. Hotel industry would not be able
to avail the input credit on the two items which will have a negative impact on this
sector.
• All restaurant are not eligible to charge GST on food bills only those who notregistered
can”t charge GST.

Five star hotels final gst rates are 28%or18%

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

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

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

Clarification on GST rates on hotel accommodation

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

In this context, it is hereby clarified that accommodation in any hotel, including 5-star hotels

31
having declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will
attract GST @ 18%. Star rating of hotels is, therefore, irrelevant for determining the applicable
rate of GST.

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 ACrestaurant
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%

Booking a hotel after GST rollout?

Here's how much you will pay

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

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

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

This is at par with standalone air-conditioned restaurants. For room rates less than Rs 1,000,

32
there will be no tax while those between Rs 1000 and Rs 2,500 will attract GST of 12%.
Analysts point out that there would no material impact on margins or cost savings of hotels
across categories.

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

33
 CHAPTER – III

INDUSTRY PROFILE

&

COMPANY PROFILE

34
 INDUSTRY PROFILE

Introduction

The Indian tourism and hospitality industry have emerged as one of the key drivers of growth
among the services sector in India. Tourism in India has significant potential considering the
rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty
spread across the country. Tourism is an important source of foreign exchange in India similar
to many other countries. The foreign exchange earnings from 2016 to 2019 grew at a CAGR
of 7% but dipped in 2020 due to the COVID-19 pandemic.

In FY20, tourism sector in India accounted for 39 million jobs, which was 8.0% of the total
employment in the country. By 2029, it is expected to account for about 53 million jobs.

According to WTTC, India ranked 10th among 185 countries in terms of travel & tourism’s
total contribution to GDP in 2019. During 2019, contribution of travel & tourism to GDP was
6.8% of the total economy, ~ Rs. 13,68,100 crore (US$ 194.30 billion).

Market Size

India is the most digitally advanced traveller nation in terms of digital tools being used for
planning, booking, and experiencing a journey. India’s rising middle class and increasing
disposable income has supported the growth of domestic and outbound tourism.

By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor
exports compared with US$ 28.9 billion in 2018.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated
US$ 75 billion in FY20.

The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double
in size by FY27 due to improving airport infrastructure and growing access to passports.

The Indian hotel market including domestic, inbound and outbound was estimated at ~US$
32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging
demand from travelers and sustained efforts of travel agents to boost the market.

35
During 2019, foreign tourist arrivals (FTAs) in India stood at 10.93 million, achieving a growth
rate of 3.5% y-o-y. During 2019, FEEs from tourism increased 4.8% y-o-y to Rs. 1,94,881
crore (US$ 29.96 billion). In 2019, arrivals through e-Tourist Visa increased by 23.6% y-o-y
to 2.9 million. In 2020, FTAs decreased by 75.5% YoY to 2.68 million and arrivals through e-
Tourist Visa (Jan-Nov) decreased by 67.2% YoY to 0.84 million. As of March 2021, the e-
Tourist Visa facility was extended to citizens of 171 countries.

In April 2021, the percentage share of FTAs was highest from USA (26.85%), followed by
Bangladesh (15.65%), Afghanistan (6.92%), UK (5.87%), Nepal (4.59%), Canada (4.27%),
Iraq (2.99%), Portugal (2.40%), Germany (1.42%), Russian Fed (1.41%) Maldives (1.39%),
France (1.33%), Sudan (1.21%), Korea (Rep.) (1.18%), and Australia (1.02%).

In April 2021, the percentage share of FTAs in India was highest at Bengaluru Airport
(29.96%), followed by Mumbai Airport (17.48%), Ahmedabad Airport (15.72%), DelhiAirport
(9.21%), Cochin Airport (4.91%), Chennai Airport (4.04%), Hyderabad Airport (3.34%),
Lucknow Airport (2.40%), Bhavnagar Seaport (2.37%), Kolkata Airport (2.11%), Calicut
Airport (1.41%), Amritsar Airport (1.35%), Kakinada Seaport (1.32%), Dabolim (Goa)
(0.91%), Mangalore Airport (0.72%).

Between January 2021 and April 2021, FTAs was 376,083 as compared with 2.35 million
between January 2020 and April 2020, registering a negative growth of -84.0% Y-o-Y due to
COVID-19.

By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue
over US$ 59 billion. However, domestic tourists are expected to drive the growth, post
pandemic.

International hotel chains are increasing their presence in the country, and it will account for
around 47% share in the tourism and hospitality sector of India by 2020 and 50% by 2022.

As per the Federation of Hotel & Restaurant Associations of India (FHRAI), in FY21, the
Indian hotel industry has taken a hit of >Rs. 1.30 lakh crore (US$ 17.81 billion) in revenue due
to impact of the COVID-19 pandemic.

The United Nations World Tourism Organisation selected Pochampally in Telangana as one of
the best tourism villages in November 2021.

36
Investments

India was globally the third largest in terms of investment in travel and tourism with an
inflow of US$ 45.7 billion in 2018, accounting for 5.9% of the total investment in the
country.

The hotel & tourism sector received cumulative FDI inflow of US$ 15.89 billion between April
2000 and June 2021.

Indian government has estimated that India would emerge with a market size of 1.2 million
cruise visitors by 2030-31. Dream Hotel Group plans to invest around US$300 million in the
next 3-5 years for the development of the cruise sector in India.

Government Initiatives

The Indian Government has realised the country’s potential in the tourism industry and has
taken several steps to make India a global tourism hub.

Some of the major initiatives planned by the Government of India to boost the tourism and
hospitality sector of India are as follows:

From November 15, 2021, India allowed fully vaccinated foreign tourists to visit India, which
in turn will help revive the Indian travel and hospitality sector.

In November 2021, the Ministry of Tourism signed a Memorandum of Understanding (MoU)

with Indian Railway Catering and Tourism Corporation to strengthen hospitality and tourism
industry. The ministry has also signed an MoU with Easy My Trip, Cleartrip, Yatra.com, Make
My Trip and Goibibo.

In November 2021, the Indian government planned a conference to boost film tourism in the
country with an aim to establish domestic spots as preferred filming destinations. This move
is expected to create jobs and boost tourism in the country.

In October 2021, Prime Minister, Mr. Narendra Modi launched the Kushinagar International
Airport in Uttar Pradesh to boost tourism.

The COVID-19 pandemic has greatly disrupted the Tourism industry. In September 2021, the
Ministry of Tourism announced plans to allow international tourists to enter India and formal

37
protocols are under discussion. According to the previous announcements, the first five lakh
foreign tourists will be issued visas free of cost.

In September 2021, the government launched NIDHI 2.0 (National Integrated Database of
Hospitality Industry) scheme which will maintain a database of hospitality sector components
such as accommodation units, travel agents, tour operators, & others. NIDHI 2.0 will facilitate
the digitalisation of the tourism sector by encouraging all hotels to register themselves on the
platform.

In July 2021, the ministry drafted a proposal titled ‘National Strategy and Roadmap for Medical
and Wellness Tourism' and has requested recommendations and feedback fromseveral
Central Ministries, all state and UT governments and administrations as well as industry
partners to make the document more comprehensive.

In May 2021, the Union Minister of State for Tourism & Culture Mr. Prahlad Singh Patel
participated in the G20 tourism ministers' meeting to collaborate with member countries in
protecting tourism businesses, jobs and taking initiatives to frame policy guidelines to support
the sustainable and resilient recovery of travel and tourism.

Government is planning to boost the tourism in India by leveraging on the lighthouses in the
country. 71 lighthouses have been identified for development as tourist spots.

The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India
Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can
register online for All India Tourist Authorisation/Permit. This permit will be issued within 30
days of submitting the application.

In February 2021, the Ministry of Tourism under the Government of India's Regional Office
(East) in Kolkata collaborated with Eastern Himalayas Travel & Tour Operator Association
(resource partner) and the IIAS School of Management as (knowledge partner) to organise an
‘Incredible India Mega Homestay Development & Training’ workshop. 725 homestay owners
from Darjeeling, Kalimpong and the foothills of Dooars were trained in marketing, sales and
behavioural skills

On January 25, 2021, Union Tourism and Culture Minister Mr. Prahlad Singh Patel announced
plan to develop an international-level infrastructure in Kargil (Ladakh) to promote

38
adventure tourism and winter sports.

The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat
Darshan tourist trains aimed at taking people to various pilgrimages across the country.

On November 4, 2020, the Union Minister of State (IC) for Tourism & Culture Mr. Prahlad
Singh Patel inaugurated the “Tourist Facilitation Centre” facility constructed under the project
“Development of Guruvayur, Telangana” (under the PRASHAD Scheme of the Ministry of
Tourism).

Under Budget 2020-21, the Government of India has allotted Rs. 207.55 crore (US$ 29.70
million) for development of tourist circuits under PRASHAD scheme.

The Ministry of Tourism’s ‘DekhoApnaDesh’ webinar series titled ‘12 Months of Adventure
Travel’ on November 28, 2020, is likely to promote India as an adventure tourism destination.

On January 26, 2021, Maharashtra Chief Minister Mr. Uddhav Thackeray inaugurated
Balasaheb Thackeray Gorewada International Zoological Park in Nagpur. It is India’s largest
zoological park spread over 564 hectares and expected to attract ~2.5 million tourists a year.

The Ministry of Tourism developed an initiative called SAATHI (System for Assessment,
Awareness & Training for Hospitality Industry) by partnering with the Quality Council of India
(QCI) in October 2020. The initiative will effectively implement guidelines/SOPsissued with
reference to COVID-19 for safe operations of hotels, restaurants, B&Bs and otherunits.

Statue of Sardar Vallabhbhai Patel, also known as ‘Statue of Unity’, was inaugurated in
October 2018. It is the highest standing statue in the world at a height of 182 metre. It is
expected to boost the tourism sector in the country and put it on the world tourism map.

Under Budget 2020-21, the Government of India has allotted Rs. 1,200 crore (US$ 171.70
million) for development of tourist circuits under Swadesh Darshan for eight Northeast states.

State Government Initiatives

In October 2021, the Tripura government collaborated with Infovalley Educational & Research
(P) Ltd. as part of a public-private partnership (PPP) to run the State Institute of

39
Hotel Management (SIHM). Through the SIHM, the government aims to empower the youth
and contribute to the growth of hotels and hospitality management in the state.

In July 2021, the Telangana government, in collaboration with Vythiri in Wayanad, has
initiated a campaign to vaccinate all tourism and hospitality stakeholders.

The Ministry of Tourism sanctioned three projects for a total amount of Rs. 179.68 crore (US$
24.24 million) under the Swadesh Darshan scheme in Gujarat.

In July 2021, the Odisha Tourism Development Corporation (OTDC) invited applications to
operate shacks in six major beaches of the state.

In July 2021, the Tamil Nadu state government decided to implement an integrated mega
tourism plan, which included new lighting arrangements for the Thiruvalluvar statue at
Kanyakumari, starting renovations at Poompuhar tourist spot and improving roads leading to
tourist spots, spiritual places and adventure tourism spots. It also includes unveiling a new
tourism policy, establishing more hotels, resorts, and convention centres and increasing
contribution of public and private sectors in the tourism sector.

In July 2021, Andhra Pradesh Tourism Authority urged stakeholders in the tourism sector in
the state to register with the Andhra Pradesh Tourism under the Tourism Trade Registration
and Facilitation Guidelines 2020.

In June 2021, the Odisha state government announced to provide a financial package for the
COVID-hit tourism sector of the state.

Achievements

Following are the achievements of the Government during 2019-20:

• During 2019-20, an additional fund Rs. 1,854.67 crore (US$ 269.22 million) was
sanctioned for new projects under the Swadesh Darshan scheme.

• Ministry of Tourism sanctioned 18 projects covering all the North Eastern States for
Rs. 1,456 crore (US$ 211.35 million) to develop and promote of tourism in the region
under Swadesh Darshan and PRASHAD schemes.

• Statue of Sardar Vallabhbhai Patel, also known as ‘State of Unity’, was inaugurated in

40
 October 2018 and the total revenue generated till November 2019 stood at Rs. 82.51
crore (US$ 11.81 million).

Road Ahead

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive
themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as
Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation
offers were guests can choose from a host of curated experiences, within the hotel.

India’s travel and tourism industry has huge growth potential. The industry is also looking
forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in
India. India's travel and tourism industry has the potential to expand by 2.5% on the back of
higher budgetary allocation and low-cost healthcare facility according to a joint study
conducted by Assocham and Yes Bank.

41
 COMPANY PROFILE

Swagath Hotels(P) Ltd is an unlisted private company incorporated on 30 April, 1973. It is

classified as a private limited company and is located in Chennai, Tamil Nadu. It's authorized
share capital is INR 75.00 lac and the total paid-up capital is INR 57.75 lac.

The current status of Swagath Hotels(P) Ltd is - Active.

The last reported AGM (Annual General Meeting) of Swagath Hotels(P) Ltd, per our records,
was held on 31 December, 2020. Also, as per our records, its last balance sheet was prepared
for the period ending on 31 March, 2020.

Swagath Hotels(P) Ltd has two directors - Panambur Ramakrishna Divakar and Manorama
Panambur. The Corporate Identification Number (CIN) of Swagath Hotels(P) Ltd is The
company has 2 directors and no reported key management personnel.

The longest serving director currently on board is Panambur Ramakrishna Divakar who was
appointed on 01 December, 1977. Panambur Ramakrishna Divakar has been on the board for
more than 44 years. The most recently appointed director is Manorama Panambur, who was
appointed on 01 February, 1983.

Panambur Ramakrishna Divakar has the largest number of other directorships with a seat at a
total of 1 companies. In total, the company is connected to 0 other companies through its
directors.

Tofler Company network is a powerful feature that allows you to explore and discover common
directorships between companies. It helps you find out other directorships of an Indian director
and where else he has business interests. The feature is available for unlimited use in
Company360 platform. Here is the video showing how you can explore company networks to
discover hidden relationships between companies.

42
Company Research Report

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and equity due-diligence. We produce our reports on companies using data from authoritative
sources to ensure every bit of information is comprehensive, up-to-date and reliable. Reports
have a short delivery time and are great value for money. Some of the information covered is:

Historical financials: Get history of financials for over 5 years along with time series charts,
graphs and ratio analysis. Shareholders and group structure: Discover the shareholders,
shareholding pattern, parent company and subsidiaries of a company. Directors and key
persons: Find out the directors, management and key people behind a company.

Mortgages and charges: Study the list of charges on the assets of a company, and its lenders..

Ratio analysis: Take help from the ratio analysis and study how the performance of company
has changed overtime.

Financial Report

The report provides important details on a Company’s financials, mortgages and charges,
shareholding, directors, group structure, ratio analysis and more, without making it
complicated. An easy to read report best suited to profile a Company.

43
 CHAPTER – IV

DATA ANALYSIS

&

INTERPRETATION

44
DATA ANALYSIS & INTERPRETATION

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

TABLE – 4.1

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

YES 80 80%
NO 20 20%
TOTAL 100 100%

GRAPH – 4.1

0%
20%

80%

Interpretation:

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

45
2. Do you enjoy what you do at your work?

TABLE – 4.2

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

YES 70 70%
NO 5 5%
MAY BE 25 25%
TOTAL 100 100%

GRAPH – 4.2

0%

25%

5%

70%

Interpretation:

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

46
3. Are you satisfied with GST applying in your hotel ?

TABLE – 4.3

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
YES 75 75%
NO 15 15%
MAY BE 10 10%
TOTAL 100 100%

GRAPH – 4.3

YES NO MAY BE

10%
15%

75%

Interpretation:

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

47
4. How would you rate your overall experience about GST application in your Restaurant?

TABLE – 4.4

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

Highly
20 20%
satisfactory
Satisfactory 60 60%
Neutral 15 15%
Unsatisfactory 5 5%
TOTAL 100 100%

GRAPH – 4.4

Highly satisfactory Satisfactory Neutral Unsatisfactory

5% 20%
15%

60%

Interpretation:

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

48
5. Have your hotel received benefits after GST application?

TABLE – 4.5

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

YES 50 50%
NO 30 30%
MAY BE 20 20%
TOTAL 100 100%

GRAPH – 4.5

YES NO MAY BE

20%

50%

30%

Interpretation:

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

49
6. Is you have stress because of applying GST?

TABLE – 4.6

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

YES 44 44%
NO 16 16%
MAY BE 32 32%
CAN'Y SAY 8 8%
TOTAL 100 100%

GRAPH- 4.6

YES NO MAY BE CAN'Y SAY

8%

44%
32%

16%

Interpretation:

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

50
7. Is your organization can provide awareness to your customers about GST application on
hotel industry?

TABLE – 4.7

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
YES 0 0%
NO 100 100%
TOTAL 100 100%

GRAPH – 4.7

0%

Yes
No

100%

Interpretation:

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

51
8. How is the relationship between you and your co-workers?

TABLE – 4.8

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
GOOD 92 92%
BAD 8 8%
CAN'Y SAY 0 0%
TOTAL 100 100%

GRAPH – 4.8

GOOD BAD CAN'Y SAY

0%

8%

92%

Interpretation:

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

52
9. Has your customers replied positively about GST application?

TABLE – 4.9

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
YES 20 20%
NO 75 75%
MAY BE 5 5%
CAN'Y SAY 0 0%
TOTAL 100 100%

GRAPH – 4.9

5% 0%
20%

Yes
No
May be
Can't say

75%

Interpretation:

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

53
10. Is application of GST positively influence on your restaurant’s performance in the
market?

TABLE – 4.10

OPTIONS NO OF RESPONDENTS PERCENTAGE OF RESPONDENTS

YES 90 90%
NO 5 5%
MAY BE 5 5%
CAN'Y SAY 0 0%
TOTAL 100 100%

GRAPH – 4.10

5% 0%
5%

Yes
No
May be
Can't say

90%

Interpretation:

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

54
11. Is your working environment is safe because of applying GST?

TABLE – 4.11

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
YES 85 85%
NO 0 0%
MAY BE 5 5%
CAN'Y SAY 10 10%
TOTAL 100 100%

GRAPH – 4.11

YES NO MAY BE CAN'Y SAY

5%
0% 10%

85%

Interpretation:

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

55
12. How would GST impact the restaurant selling alcoholic beverages?

TABLE – 4.12

NO OF PERCENTAGE OF
OPTIONS RESPONDENTS RESPONDENTS
GOOD 59 59%
BAD 24 24%
CAN'Y SAY 17 17%
TOTAL 100 100%

GRAPH – 4.12

GOOD BAD CAN'Y SAY

17%

24%
59%

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.

56
CHAPTER – V

FINDINGS

SUGGESTIONS

LIMITATIONS

CONCLUSION

57
FINDINGS

1. 80% of the Owner had the first business related to hotel sector and rest other 20% had
other industry.
2. 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 themthen
they enjoy their work otherwise not and remaining 5% are not enjoy their work because
of unsatisfied targets.
3. 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.
4. 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.
5. Hotel Industry owners cannot provide awareness to their customers about GST
application on their hotel. Because it’s not the part of their business.
6. 92% of owners have good relationship with his co-workers, rest 8% can’t say anything
about that.
7. 20% of the owners said their customers positively replied on GST application, 75% of
owners said their customers are not positively replied on GST and rest 5% said that may
be their customers replied positively on GST application in their firm.
8. 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.
9. 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.
10. 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.

58
CONCLUSION

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

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

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

59
LIMITATIONS
Due to time constraints, the study period is limited to only 45 days. Hence not able to collect
much more information regarding hotel industry.

The area of study is limited to Hyderabad and Rangareddy. 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.

60
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.

61
 1.9. BIBLIOGRAPHY
BOOKS

1. Sharma Publication , Topic … “ Concept of Tax , Structure of Tax, Indian

Taxation System '' Indirect Tax Text Book B com Ivth Semester First Edition
2014.
2. Kothari C.R. 2nd Edition (2004) Research Methodology … Topic “ Concept &
Meaning Of Research , Sampling , Methods and Techniques Of Data collection
and Tools '' B com , BBA and MBA and M.com Textbook.
3. Pinki , Supriya Kamna, Richa verma “ Goods and Service Tax”--Panacea For
Indirect Tax System in india ,” Tactful Management Research Journal”, Vol12,
issue 10 July 2014

62
 4. Agogo Mawulli “ Goods and Service Tax --- An appraisal Paper presented at the
PNG Taxation Research and Review Symposium. Holiday inn port meoresby, Pg
No.29-30 , April 2014

WEBSITES
1. http://www.gstindia.com
2. https://en.wikipedia.org
3. http://www.gstn.org
4. http://www.cbec.gov.in
5. http://www.financialexpresss.com
6. http://www.gstcounsil.gov.in
7. http://www.swagathgroupofhotels.com

63
 QUESTIONNAIRE

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. SatisfactoryC. 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 D. CAN'Y SAY
7. Is your organization can provide awareness to your customers about GST
application on hotel industry?
A.YES B. NO

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

A. GOOD B.BAD C. CAN'Y SAY

9. Has your customers replied positively about GST application?

A.YES B.NO C. MAY BE D. CAN'Y SAY

64
10. Is application of GST positively influence on your restaurant’s performance
in the market?
A.YES B.NO C. MAY BE D. CAN'Y SAY

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

A.YES B.NO C. MAY BE D. CAN'Y SAY
12. How would GST impact the restaurant selling alcoholic beverages?
A. GOOD B.BAD C. CAN'Y SAY

65