HIGH ALERT.........On Mission of Spreading Awareness

I have planned to put a profound effort towards educating the people on the burning issues of the society-their truth within & their effect on our daily regime.

My first voice is against the irregularity in charge of AP VAT by restaurants & hotels.

Charge of VAT by Hotels

Facts of the Case:

The AP Value Added Tax (Generally referred to as AP VAT) is also levied on boarding & lodging facilities provided hotels & restaurants as per AP VAT Act, 2005. Since its effective enforcement it was applied @ 12.5% on 60% of the restaurant to hotel bills which would aggregate to 7.5% of the bill value. However in March 2009 the underlying rules of the charge were amended & were effected from May 09. The effected changes are-

Ø Every dealer, being a star hotel, having a status of three star and above, as recognized by competent authority prescribed by the Government of India, shall pay tax at the rate of twelve and half percent (12.5%) of the taxable turnover of the sale of supply of goods, being food or any other article for human consumption of drink, served in restaurants attached to such hotels or anywhere whether indoor or outdoor

Ø Every dealer, being a hotel other than those mentioned in clause (a), shall pay tax at the rate of four percent (4%) of the taxable turnover of the sale or supply of goods served in restaurants attached to such hotels or anywhere whether indoor or outdoor,

Ø Every dealer, other than those mentioned in clause (a) and clause (b) and whose annual total turnover is rupees 1.5crore and above shall pay tax at the rate of twelve and half percent (12.5%) of the taxable

Conclusions

In Simple Terms, the charge of VAT @ 12.5% by hotels graded 3 Star or above is authentic & any other hotel having a turnover (or simply Annual Sales) less than 1.5Crore should charge only 4% VAT. Moreover any hotel other than graded above 3star having turnover of more than 1.5Crore can charge 12.5% VAT.

Some readers may be wondering if they require any special effort in knowing the turnover of the hotel they are dining. But it’s quite simple,

If the annual Turnover of the hotel needs to be more than 1.5Crore, its monthly turnover should be around 12.5Lakhs & daily turnover about Rs.42000/-. I think it’s not that difficult guessing this.

However if you find any difficulty even in guessing his turnover right then kindly observe the charge & pay it promptly hoping for the charge is right. But if you notice any hotel still charging VAT @ 7.5% then kindly ask the concerned to revise the billing & if the authorities in the hotel ignore to do so then kindly take some pain in mailing me a copy of the bill to k.santoshmehra@gmail.com