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Hotels, travel agencies refunding GST after the rate cut

GST Rate


If you had made a hotel booking in September or earlier for a stay in October and onward, you might have received a message regarding a refund of some amount. Keeping in view with the Goods and Services Tax (GST) reduction, the amount of tax applicable on your hotel booking has been reduced which means you are entitled to a refund. After lowering of GST rate for the hotel sector, this is probably the first time when a refund has been initiated.

The GST Council in its 37th meeting, held in Goa on September 20, had rejigged the tax slabs from four to three and reduced the highest tax rates from 28% to 18%. To make the new rates effective, the Central Board of Indirect Taxes and Custom (CBIC) and States’ Tax authorities notified it by September 30.

Businesses are required to charge only the applicable GST and should refund any excess charged amount to the end consumer. Additionally, the development of stable IT processes facilitates faster refunds which allow consumers to look forward to fairer business practices from B2C businesses.

Many hotels and travel aggregators offer special packages for vacations and long weekends at special rates for those who make an advance booking. Since old tax rates were applicable till September 30, anyone booking by that date had to pay a higher tax for a stay in October and onwards. However, if rates have been lowered, goods and service providers are required to pass on the benefit to the consumer, otherwise, the matter could go to the Anti-profiteering Authority.

To avoid action by National Anti-profiteering Authority (NAA), businesses can suo motu initiate the process of lowering the price or refund the excess amount in case of an advance booking. Anyone not receiving any refund intimation for a hotel booking in India made before September 30 for a stay in October onward should contact the hotel or travel aggregator for the same.

Arpita Bora is leading the content writing team at HostBooks Limited. She has pursued her Masters in Commerce. With over 4.5 years of experience in technical and creative writing, she specializes in both long and short-form digital content.

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