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MCQ Self Challenge # 0071 on Special Provisions relating to Tax Rate in case of Accommodation Services

Special Provisions relating to Tax Rate in case of Accommodation Services

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical professional knowledge on special provisions relating to rate of tax in case of accommodation services in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 71.1: On 1st of July B provides accommodation service to C for a declared tariff of Rs 1200, but gave a discount of Rs 300 and the value of supply was Rs 900.Which among the following is correct in relation to rate of tax?

A) Nil.

B) 12%

C) 18%

D) 28%

MCQ 71.2: What if in above question, B provides accommodation services to C on 28th of July 2018?

A) Nil.

B) 12%

C) 18%

D) 28%

Sincere Regards
CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge # 0071

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on amendment on provisions in GST act which is giving effect to the changes in rate of tax in case of accommodation services.

 

Answer to MCQ 71.1: B) 12%.

 

Answer to MCQ 71.2: A) NIL.

 

Practical Analysis for MCQ 71.1& 71.2:-

  • As per notification no. 11/2017 central tax rate dated 28th June 2017 as amended by various notifications thereafter, the rate of tax for accommodation services would be as follows –
Declared TariffRate of Tax
1000 to 249912%
2500 to 749918%
7500 and above28%

 

  • Also accommodation services having declared tariff less than Rs 1000 are exempted through Notification No. 12/2017 central tax rate dated 28th June 2017.
  • But government vide Notification No. 13/2018 dated 26th July 2018 has brought an amendment in notification no. 11/2017 to provides that the word declared tariff wherever occurred to be substituted with the word “value of supply”.
  • Similar change has been brought by Notification 14/2018 to amend the Notification 12/2017 so as to substitute the word declared tariff by the word “value of supply”.
  • These amendments are effective from 27th of July 2018.
  • The above amendments provides a major relief to the hotel industry wherein rate of tax on accommodation services shall be based on transaction value instead of declared tariff.
  • Based on the above analysis, correct answer MCQ 71.1: B) 12%.
  • Correct answer MCQ 71.2 : A)

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321 Whatsapp: 8799772245

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

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