Kerala AAR: Houseboat services are subject to an 18 percent GST charge, although there is an ITC available.

Have you ever traveled in a houseboat? Do you think the houseboat should be charged GST? If hotels are paying GST, don’t you think houseboats should also pay?
Kerala’s tourism industry is defined by houseboats gliding through the backwaters. The GST-Authority for Advance Rulings (AAR), Kerala court, has ruled that the 18 percent Goods and Services Tax (GST) will apply to cruises, whether day trips or overnight journeys.
GST (Goods and Services Tax) is an indirect tax (sometimes known as a consumption tax) imposed on India’s supply of goods and services. It is a destination-based, multistage, comprehensive tax: comprehensive since it includes practically all indirect taxes, with the exception of a few state levies.
EVM Motors and Vehicles, a car dealership that had expanded into the hospitality industry, requested this judgment. The Alapuzha district’s ‘Le Leela’ resort offered houseboats with state-of-the-art bedrooms, dining rooms, drawing rooms, and kitchens. Overnight cruises and day trips were both available on the houseboats. Meals were included in the all-inclusive package, although alcohol was charged individually if it was offered.
The cruise operator will be allowed an input tax credit (ITC) for expenses paid on restoring, outfitting, maintaining, and repairing the houseboats because they are categorized as “passenger transport services.”
Input tax credit refers to the ability to deduct the tax you’ve already paid on inputs while paying output tax.
Food, which is included in the aggregated price of the cruise held by the AAR, will also be eligible for an input tax credit. The houseboat operators, who the current pandemic has hard struck, will be relieved by this verdict, which clarifies ITC claims.

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