All posts by Manasi Shah

How GST Return Filing Works For The Indian Hospitality Industry

Filing tax returns poses as a very vital step towards maintaining the country’s economy and one’s business. That’s why, with new tax regime rolled out in India comes the major responsibility of GST return filing; which is going to be a monthly deal from September 2017.

Previously, we researched and analyzed the impact of GST on the Indian hospitality industry. Adhering to the slab-wise GST structure for the industry, the hoteliers and restaurateurs will need to be discrete and accurate with the sales and purchase data and clear up the disputes and amendments.

Ergo, following our impact analysis, we’ve come up with the action steps you as a hotelier (or a restaurateur) need to take for GST return filing for your hotel (or a restaurant).

Temporary Steps for July and August: GSTR-3B Form Submission

What do hotels and restaurants need to know?

Mandatory for all GST registrants, GSTR-3B is a simple and summarized form introduced by the government to let you file GST returns for the months of July and August*. You’ll need to file GSTR1, GSTR2 and GSTR3 for both these months later in September.

GSTR-3B won’t be applicable from September onward, and you’ll have to file complete GSTR1, GSTR2 and GSTR3 forms for your tax returns.

You won’t need to provide detailed invoice information for GSTR-3B, and rather only the total amount pertaining to each field in the required format of the data.

Filing GSTR-3B is mandatory for hotels and restaurants who fall under the GST regime. If you’ve had no transactions at your property in these two months, you need to file a nil GSTR-3B form.

Subject to the announcements made by the government to not accept GSTR1, GSTR2 and GSTR3 in future for any reasons whatsoever, it’ll be mandatory for you to file GSTR-3B for that month.

What is GSTR1, GSTR2 and GSTR3?

Under the GST law, a normal taxpayer will be required to furnish three returns monthly and one annual return. The three returns monthly are said to be as: GSTR1, GSTR2 and GSTR3.

All three of these returns are mandatory for all GST registrants. You’ll need to file NIL returns if you’ve had no transactions in that month. In addition, Input Tax Credit will have its own mechanism for these returns, such that, CGST credit cannot be set off against SGST liability and vice versa.

What is GSTR1?

GSTR1 will include the outward supplies you made to other registered businesses (B2B) at invoice-level and that to the unregistered businesses at rate-wise level.

The GSTR1 form contains 13 tables in all, according to which you’ll need to submit the sales data of your property of that month. Considering your hotel (and/or restaurant, as the case maybe) type and the sale you made, only some tables will be applicable for you and not all.

Using your GSTR1, the government will populate the GSTR 2A of the recipient (or guest) who purchased from you and your GSTR3. Once GSTR 2A is populated, you’ll be able to accept the sales; which will in turn lead your recipient to file his GSTR 2 in next 5 days. That’s why, you are given 5 days time to amend your GSTR1; post which you won’t be able to make any revisions in the return.

What is GSTR2?

The GSTR2 will contain details of the inward supplies you purchased in the month. The supplier you purchased from will be able to make the amendments to his GSTR 1A after you’ve uploaded your GSTR2 form.

In this form, you’ll need to mention whether you’re eligible for Input Tax Credit or not. If yes, you will have to fill the amount of eligible Input Tax Credit as mentioned in the invoice.

What is GSTR3?

Most of the details in the GSTR3 will be auto-populated from GSTR1 and GSTR2. Only some information, you’ll have to verify and add. If you have not filed your GSTR1 and GSTR2, you won’t be allowed to file your GSTR3.

The process goes like, once your GSTR3 gets generated, you’ll have to pay off the tax credit and then file the GSTR3.

Steps hotels and restaurants need to follow after September

The GST return filing is going to be a 3-step detailed process mainly, followed by the actual payment. This is how its going to work:

What’s the timeline for GST return filing?

Following is how the revised GST returns filing dates look like:

For the Month GSTR-3B GSTR1 GSTR2 GSTR3
July 25th August, 2017 1st-10th October, 2017 31st October, 2017 10th November, 2017
August 20th September, 2017 1st-5th October, 2017 6th-10th October, 2017 10th-15th October, 2017
September onward –NA– 10th of next month 15th of next month 20th of next month

How can hotels and restaurants file their GST returns?

Filing GST returns under the newly introduced GST regime is extremely pivotal as the delay or mismatch or absence of filing the returns will influence the credibility of your business, your compliance rating and prompt returns. There are primarily 4 ways in which you can file your GST returns. Nonetheless, you’ll have to solve the disputes yourself regardless of the method you choose to file your GST returns.

  1. Directly via the Government Portal: The most simple and straightforward method to file your GST returns. Calculate, form and submit your returns manually on the government portal, make amendments and finalize the tax payable.

    Submission Amendments Cost Efforts
    Manually via the portal Manually via the portal NIL 10-12 days to gather data

    Major Hassle: Since you need to gather and submit all the details manually, it can give way to errors and inaccuracy.

  2. Through a Certified GST Practitioner: Considering the current scenario, most of the hoteliers and restaurateurs rely on their GST practitioner to submit their GST returns.

    Submission Amendments Cost Efforts
    GST Practitioner Guided by GST Practitioner ~ INR 5000/month 10-12 days to gather data

    Major Hassles: Coordination with GST practitioner, troubles of gathering the data and eventually having to make amendments and resolve disputes manually under the guidance of the practitioner.

  3. Through a GSP: Either you can directly contact any GSP from the GSTN approved 34 GSPs across the country, or choose a hospitality solutions provider who has a ready integration with GSP with their hotel PMS and restaurant POS systems.

    Submission Amendments Cost Efforts
    GST Software of the GSP GST Software of the GSP Cost of the GSP 10-12 days to gather data

    Major Advantage: You’ll be able to make amendments in the GSP software directly from the interface itself, thus reducing your hassles of downloading the file and manually solving the disputes. Besides, an accounting software may or may not be suitable for hotels and restaurants, but any GSP will be ideal for the industry.

    Note: We have ready integration with JioGST GSP, such that, you’ll be able to submit your GSTR1 data directly from our systems automatically to the GST software. Cost of getting JioGST GSP will be INR 2000/month with JioFi device and unlimited 4G data connection.

  4. Through Tally Accounting Software: Tally is a certified GSP as well a GST-ready accounting software, which will provide you with all of your purchase data accurately in the required format.

    Our GST-compliant hotel and restaurant management systems have a ready integration with Tally. On that account, if you choose this option for filing your tax returns; you’ll have GSTR1 data ready from our software and GSTR2 data ready from Tally.

    In addition, Tally being a GSP; you will be able to directly submit your tax returns to the government through Tally’s GST software.

    Submission Amendments Cost Efforts
    Through Tally Through Tally Cost of Tally software 3-4 days to gather data sales data

    Major Advantage: Since Tally is a GSP and a GST-ready accounting software, you’ll be cutting down a step here to get GSTR2 data and submit your returns through a single means.

Why having a hotel or restaurant software is recommended?

In either of the above cases, you’ll have to collect and submit your sales (outward supplies) and purchase (inward supplies) data from your accountant (if you have). Consequently, while gathering the sales and purchase details; your hotel or a restaurant will need help from both – the practitioner/accountant and the PMS or POS software you use. Automated operations, ready data, and several other benefits of a GST-ready hotel and restaurant software can help you in filing GST returns.

  • Available Data: GST-compliant PMS or restaurant POS systems will provide you with ready GSTR1 data right from the system, thereby in the long run, easing your efforts of filing GSTR1 and even in filing annual returns.
  • Cost-effective: Whether you choose to go via the government portal directly, or hire a practitioner, or any other way, getting a hotel or restaurant software and an accounting software will prove to be considerably cost-effective and time and effort-saving.

    Compared Costs*

    GST Practitioner Cloud PMS On-premise PMS On-premise POS Tally Software
    Cost/Month = ~INR 5000 Cost/Month = ~INR 2000 per 10 rooms One-time license fee = ~INR 46000 One-time license fee = ~INR 23000 One-time license fee = INR 18000 for one user
    Cost/Year = ~INR 60000 Cost/Year = ~INR 24000 Optional AMC Charges = ~INR 6900/year after 1st year Optional AMC Charges = ~INR 3450/year after 1st year License Renewal Fees = INR 3600/year

    *The prices shown here may tend to change as per your requirements.

  • Interface with GSP: The all set interface of the software with a GSP will help you submit your returns automatically from your hotel and restaurant software through the GSP software and to the government.
  • Error-free: Without a software, the returns that you submit may be prone to manual errors and calculation glitches. But with the PMS or POS software’s automated operations, you have minimal worries about accuracy.
  • Manual Amendments: In case of any amendments, you’ll have to manually download the file from the government portal, make the necessary changes and upload the JSON file (mediator file) again, thence making it a tedious process.

Suffice to say that, purchasing a software for your hotel or restaurant will be highly beneficial for your business, and help you in your GST return filing; regardless of the option you choose from above.

We have GST-compliant cloud PMS, on-premise PMS and on-premise restaurant POS system to give you everything you may need in managing your taxes and operations, in addition to offering customized GST reports and GST-compliant invoices.

Handling and filing multiple returns may take a toll on your business sooner or later. Solidify and streamline your operations in this prevalent GST regime with GST-ready hotel software and restaurant management system.

Check out our GST-compliant systems:

eZee Absolute Cloud PMSeZee BurrP! On-premise POSeZee FrontDesk On-premise PMS

Note: All the information given on this page is subject to the notifications passed by the GSTN and Government of India.

Impact Analysis Of GST On Indian Hospitality Industry

Hospitality industry is a versatile field encompassing accommodation and entertainment services, accounting, food and beverage, event management and above all, guest satisfaction.

With that, there comes an imperative need for this industry to walk hand-in-hand with latest updates of the market, and seek for all-inclusive technology solutions which can help them in governing their hotels and restaurants effectively. Wider the utility, greater their exposure towards taxation and other compulsions from the government authorities. Along these lines, the Indian hospitality industry gives way to heaps of levied taxes and scores of highly paid services. So, as India warms up for GST, the hospitality industry should get ready with GST compliant hotel software. The impact of GST will go far and wide, enabling everyone, right from a manufacturer and a supplier to distributor and consumer to give their part in improving the country’s economy.

Here, we have carried out a complete impact analysis of GST on the Indian hospitality industry. Read on to get a detailed overview.

Taxation In India

Taxes ensure that, whatever the government provides you for your progress, is duly paid back after a certain pre-calculated ROI, eventually generating income for upcoming projects.

Whether it’s a direct tax, or an indirect tax, or just rolled out Goods & Service Tax; whether levied by the central or the state governments, taxes are a mandate which come along with anything you produce, manufacture, import, buy or sell regardless of the industry you may belong to.

Taxes in India have been a surefire way to do that ever since the Constitution of India has allocated the power to levy taxes to the Central and State governments.

The current taxation scenario in India states two major and distinct types of tax regimes in India: Direct Tax and Indirect Tax, contrasting primarily in the way they are implemented. Direct taxes are those which you pay directly to the government, namely, income tax, wealth tax, corporate tax, property tax, including others.

 

Whereas, indirect taxes are those which are not directly levied on the taxpayers, but rather levied on the goods and services you consume; such as, the value added tax (VAT), service tax, sales tax, excise duty, customs tax, and others. The indirect taxes are added to the price of the goods and services, leading to a higher amount being paid for them.

The Need For GST In India

According to the current indirect taxation scenario running in India; state government imposes VAT, luxury and entertainment tax, entry tax and taxes on betting and gambling; whereas the central government levies excise duty, service tax, customs duty and central state tax.

This shows that, for goods produced or manufactured within the country and then consumed later on; VAT is computed on a value which includes excise duty. And with different government imposing them, the credit of VAT is not available against excise and vice versa.

This indicates a cascading effect of taxes, that is, a currently functioning tax over tax regime.

This leads to a high-cost and inefficient tax structure prone to revenue leakages. Thence, the need for a comprehensive indirect tax structure came up, giving way to Goods and Service Tax. So, a short while ago, the government of India passed the long overdue GST bill, taking the whole country in a wave of extracting the corresponding act and reforms.

India will be now, one of the 160 countries worldwide, to have implemented GST in it’s economy.

Similar to Canada, India will have a dual-GST model; wherein the tax will be administered by the central as well as state government, Brazil being the only other country to adopt a dual-GST model. For a sale within the state, SGST (State GST) and CGST (Central GST) will be applied. Whereas, for a sale outside the state, IGST (Integrated GST) will be levied. The CGST and IGST will be collected by the central government; and SGST by the state government. Along with this, the GST council has narrowed down on a 4-tier tax structure of 5, 12, 18 and 28 percent; such that 12 and 18 percent will accommodate most of the goods and services.

Impact Analysis Of GST – What does it bring for Indian Hospitality Industry?

In the current indirect tax regime, the hospitality industry is plagued by multiple taxes of service tax, VAT and luxury tax; eventually being a victim of tax over tax. The GST with rate dependent on annual turnover of the hotels and restaurants along with the tariff they impose and services they provide will subsume all of these taxes and bring them under one single entity. Moreover, it will help reduce multiple taxation, giving a significant boost to the hospitality and tourism industry.

Presently, the centrally administered service tax is levied at 9 percent in the hotel industry and 6 percent in the food & beverage sector. Besides that, the luxury tax and VAT are state-dependent.

Therefore, the effect of GST will be liable to the location of your property as well as the annual turnover of your property.

Hotels and lodges with a tariff less than 1000 INR will be exempted from GST, whereas those having their tariff between 1000 to 2500 INR will attract a GST of 12 percent. The hotels having tariffs in the range of 2500 – 7500 INR will be imposed a GST of 18 percent, whereas luxury and 5-star hotels will be imposed a huge GST rate of 28 percent, bringing a dampening effect on the sector. Take a look at how hotels in India will be effected post GST rollout:

Tariff Range GST Rate
< INR 1000 No tax
INR 1000 – INR 2499 12%
INR 2500 – INR 7499 18%
> INR 7500 28%

Additionally, the Food and Beverage (F&B) sector is going to have a neutral to marginally positive impact due to GST depending on the restaurant’s turnover and services they offer. Owing to the high abatement rate of 60% in the sector, the overall tax comes close to 18.5-20.5% currently. Therein, a major impact will fall on AC restaurants inside 5-star and luxury hotels, which have attracted a GST of a whooping 28%. Here’s how the restaurant industry will fall under GST:

Turnover & Services GST Rate
< INR 50 Lakh 5% (Optional)
Non-AC Restaurants Restaurants Without Liquor License 12%
Restaurants with AC or Central Heating 18%
Restaurants Serving Alcohol 18%
AC Restaurants Inside 5-star Hotels & Above 28%

Supply of food and drinks, banqueting and outdoor catering will fall under a GST of 18 percent rate, including alcohol, food and other supplies as a bundled service.

The major impact of GST will fall on banqueting, wherein the effective tax comes up to ~23-35 percent, following the luxury tax applied by selected state governments.

The GST of 18 percent will thus lead to banquets becoming reasonable consequently offering a huge haul to the hospitality industry.

In a nutshell, the GST is going to have a neutral impact on the indian hospitality industry for the most part, except the banqueting services, luxury hotels and restaurants.

Technology In GST Compliant Software – An Important Factor

Hospitality industry has always been a competitive and an ever progressing one. Because of it’s widespread exposure across the world, technology becomes an unavoidable and pivotal factor to maintain it’s reliability and newness. That’s why, when one talks about recently introduced tax reforms, government rules and regulations for this industry; a major part of it is taken by hospitality software.

As the GST has hit the sub-continent with a wave of brand-new tax regime, it is substantial for all hoteliers and restaurateurs to go for GST compliant hotel software. eZee Technosys, being one of the very few companies to offer a complete package of integrated hospitality solutions; has always been up-to-date with any technological or economical trends of the industry. And it efficiently manages to keep it’s users in pace with contemporary updates.

Be it regional or worldwide, eZee has proved itself as a pioneer in the industry. Following a successful customization of our solutions as per GST compliance for our users in Malaysia, we have developed our solutions as GST ready hotel software for India.

 

Considering the demands of GST norms, billing and tax calculation for hoteliers and restaurateurs in India, eZee solutions will let you manage your property efficiently and impart exceptional services to your guests through accurate tax calculation, GST-compliant invoice and receipt generation, submission of multiple GST returns on a timely basis and more.

Our cloud PMS, on-premise PMS and restaurant POS software are now GST compliant, ready to accommodate your GST requirements. Sign up for our GST ready software right now.

GST Compliant Cloud PMSGST Ready Restaurant SoftwareOn-premise GST Friendly PMS

Suffice to say, it’s a known fact that taxes play a vital role in the growing economy of any country, giving way to a streamlined and well-maintained growth structure.

*Note: This information is subject to the tax reforms employed by the Government of India.

Team Success: How Did Our Support Team Win Hearts

When you think about traveling, what comes in your mind?
Mountains.. Or lakes.. Or beaches.. Or amidst nature’s lap? Maybe that’s what turns a random journey into a remarkable one.

This is how eZee’s annual picnic turned out to be one of many memorable times for everyone. Carrying a dire need of an escapade from the monotonous routines, eZeeites embarked on for 2-day picnic at Hill Zill Resort, Bordi.

And when our picnic was put to effect, we began contemplating on all possible scenarios which might lead to our 24×7 support’s letdown. We aimed to ensure that while we are out enjoying, our users did not face any difficulty. We deliver, what we promise.

We Were All Set!

The resort was truly a part of nature’s abode. But as they say, when you are off to do something good, you are definitely going to face some blockades.

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A man in battle is never on vacation.

Undertaking the user-first approach, our major objective was that despite anything, our users should not face any inconvenience. For then, we wanted that none of our team members miss out on any activities at the event. Aware of the hurdles we might face on account of the resort’s far-off location; we were prepped with a bunch of plans to keep our 24×7 support up and running.

Back up plans were set up; backup of those backup plans were forged. And we left no stone unturned to give the best in our whole team’s absence. A weekend, less resources, and internet connectivity issues: it poses a challenge to manage it efficiently. Imagine the efforts!

Getting a great team in place was half the job done.

For us, our preparations started days before the actual event. With one member from each departments; NextGen Support, Cloud Support, Development teams, as well as from cloud deployment team, we had a team ready to leave couple of days before the picnic, to set up our make-shift support center at the resort.

2 net-setters from different internet service providers, 4 members, and 2 days. That’s what it took for us to assemble our back-up plan. Luckily, we received absolute co-operation from the resort owner, letting us occupy their reception area without any disruptions. With our support center ready at the destination, our Goa team too chipped in with their share.

And the best part was, our team members volunteered to provide support during the picnic hours. We put forth a projected agenda for the support team, such that they get a fair chance to participate in the event activities. Therefore, our support was divided into two-hours each between the team members. Accordingly, one senior and one junior support engineer were paired together, helping them get acquainted with each other and learn.

Support at Picnic

Adding another feather to the cap, when all of us were exhausted after a hard-rock dance party on the first day, some of our team members went ahead and provided support for the whole night.

And We Nailed It

And we did it. Against all odds, our team managed to surpass the barriers and gave an excellent support to our users. Such that, our users could not predict that we were solving their queries not from our office, but from a place 150 kms away.

Quality is remembered, long after price is forgotten.

In such wise, when the resort owner observed our team toiling even during the picnic to ensure our users’ work is not disrupted, he peeped in to find out about eZee. Fascinated by our service and dedicated efforts for our users, the resort’s owner found himself asking for our product demonstrations. Such was our team’s star quality, that he went on to adapt eZee solutions for his resort after knowing about our products and having a conversation with our sales team member.

Picnic_1

Hill Zill Resort’s owner, Nagesh Pai says, “I’ve never seen a more pro-active team. The best part of eZee is that the products are very comprehensive. They have been developed after considering a hotelier’s each requirement in mind. Even the smallest one. At least 4 of your team members were always present at the reception, either chatting or talking to your clients on the phone, whenever I walked past the place. I can see the efforts you make for your users to have the best experience with your products. And I highly admire that.

The ‘Extra’ For ‘Extra-Ordinary’

With an efficient team, and a zest to offer the finest to our users, we willingly went out of the way to make sure that no query which comes to us goes unsolved and each of us had an even-handed experience. With a spirited support team, always on toes to resolve the users’ queries, we managed to win over hearts with our dedication even on a picnic event.

You either find a way, or make one.

Pursuing a customer-orientation approach since its inception, eZee has never failed to put forward the user’s needs in all situations. The high-ended team work, dedication and co-operation of not only our support team, but also from other teams makes it worth the whole result.


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