Hi
I am looking for the interpretation of a potentially conflicting issues in GST Act/Notification etc.
1. Scenaio specific to small accomodation/Homestay/Bed n Breakfast providers
2. It is not mandatory for a business/individual to register for GST if his annual turnover is less than Rs.20.0 Lacs. So that means he can not collect GST from his customers.
3. These businesses are pretty much dependent on travel portals like AirBnb , ClearTrip, MakeMyTrip , Booking.com etc.
4. The business model of all of the above portals are the same EXCEPT in one aspect with Booking.com.
All other portals EXCEPT booking.com collect money from online booking customer and send out the money to accomodation providers minus their
a) commission + GST
b) GST on Room Rate if it is more than Rs.1000 tariif according to slabs.
In case of Booking.com they do not collect any money from customer . All the money is collected by the accomodation provider.
Booking.com sends monthly invoice for
a) Commission on Sales ( No GST on commission)
b) GST statement on Room Sales according to tariff slabs.
Collection and remittances of GST was made the responsibility of the E-commerce operator vide Notification 17/2017 (tax rate).
5. In the case of the these small providers since they are not registered for GST they can not collect GST on Room Tariff from customers. It is understandable that they have to pay GST on commission as it is a 'service' they avail from the portals.
So do you see the conflict ? On one hand the accomodation provider is not required to register for GST (ie, under Rs.20.0 Lac/annum) and just because he is listed on a portal makes him liable for GST on Room Tariff which he can not collect from Guests because he is not registered for GST. GST payment on commission to portal is understandable.
Is this really a conflict in GST Act OR is it being mis-interpreted by portals OR are the portals making EXTRA money in the confusion ??
CAclubindia
