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GST collections pegged at Rs 7.61 lakh crore for FY20; FY19 budgeted target missed

GST collections pegged at Rs 7.61 lakh crore for FY20; FY19 budgeted target missed

New Delhi: GST collections by the Centre missed the budgeted target set for the current fiscal by Rs 1 lakh crore, while total mop-up from the indirect tax has been pegged at over Rs 7.61 lakh crore for 2019-20.

The government had budgeted to collect over Rs 7.43 lakh crore from Goods and Services Tax (GST) in the current fiscal ending March. However, in the revised estimates, the revenue mop-up has been pegged at over Rs 6.43 lakh crore.

So far, in the 10 months (April-January) of the current fiscal, total GST collections by the Centre and states stood at over Rs 9.71 lakh crore.

For the full fiscal 2018-19, the GST collection target of the Centre and states was Rs 13.48 lakh crore.

Presenting the Interim Budget for 2019-20, Finance Minister Piyush Goyal said in spite of major rate reductions and relaxations, revenue trends are encouraging.

“The average monthly tax collection in the current year is Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year,” Goyal said.

The state revenues, he said, are improving with guaranteed 14 percent annual revenue increase for the first five years from the implementation of GST.

The Goods and Services Tax (GST) was rolled out on July 1, 2017, and has consolidated 17 central and state levies.

Goyal added that GST has resulted in the increased tax base, higher collections, and ease of trade.

“This will reduce the interface between the taxpayer and the government for day-to-day operations and assessments. Now returns are fully online and e-way bill system is in place,” he said.

Goyal said with the introduction of GST, inter-state movement of goods has become faster, more efficient, and hassle-free with no entry tax, check posts, and truck queues.

The minister also said that the GST rate has been continuously reduced, providing relief of about Rs 80,000 crore annually to consumers.

Most items of daily use for the poor and middle class are now in the zero percent or 5 percent tax slab, he said.

“Our government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a group of ministers to examine and make recommendations in this regard at the earliest,” he added.

Further, he said more than 35 lakh small traders, manufacturers, and service providers will benefit from the trader-friendly measures.

“Soon, businesses comprising over 90 percent of GST payers will be allowed to file a quarterly return,” Goyal said.

GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in September, Rs 1,00,710 crore in October, Rs 97,637 crore in November, Rs 94,725 crore in December 2018 and over Rs 1 lakh crore in January 2019.

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GST entry error proves costly to company

GST entry error proves costly to company

But High Court has stepped in to save a firm that was deprived of credit of nearly Rs 10 crore, by asking the nodal officer to decide on a correction

The High Court has directed a GST nodal officer to consider the corrections sought by a company which had made a mistake while filing a GST form. This had led to the deprivation of credit to the tune of nearly Rs 10 crore. The company said it was a bonafide error which should be corrected.

Pragati Automation Pvt Ltd approached the HC with a petition seeking direction to the GST authorities to permit it to correct an error in the GST Tran-1 form it had filed. Due to the “bonafide error which has crept in while filing the form,” the company was “deprived of the transitional credit of an amount of Rs 9,74,57,802 in their electronic credit ledger”.

Considering the problem on hand the HC noted, “It is the contention of the petitioner that after the GST regime has been implemented in India, the petitioner filed GST TRAN-I claiming the credit of Rs 9,74,57,802 in Column-5 of Table 5(a) of Form GST TRAN-1 well within the time prescribed by the statute. Revised Form GST Tran-1 was filed by the petitioner on 27.12.2017 after including the details of goods sent to job worker and held in stock on behalf of the principal manufacturer in terms of Section 141 of CGST Act credit pertaining to job work.

However, credit claim was indicated only in Column-5 of Table 5(a) but not in Column-6. The electronic credit ledger reflected the credit of Rs 5,89,346.”

The nodal officer is obligated to consider the complaint and take a decision in the matter.

–High Court

The company made several complaints to the GST nodal officer but these were not considered, forcing it to file the petition before the High Court. The HC said that the nodal officer is obligated to consider the complaint and take a decision in the matter. Since it was not done, the HC ordered the nodal officer “to consider the complaint/representation made by the petitioner to the writ petition and take a decision in accordance with the law in an expedite manner.”

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 Source: Bangalore Mirror Bureau


CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

  • Out-and-out sales and high sea sales outside the ambit of GST:Transactions, where goods are physically moved from a place outside India to another place outside India, without such goods entering the territory of India (known as out-and-out sales in trade parlance), have been declared neither as supply of goods nor supply of services under as Schedule III of the CGST Act. Transactions of high sea sales are also included under Schedule III.
  • Reverse charge on procurements from unregistered dealers:Rather than a blanket levy of tax on procurements from unregistered dealers under reverse charge mechanism, Section 9(4) has been amended to levy tax only on procurements by notified assessees. It remains to be seen which class of assessees will be notified for this purpose
  • Ambit of input tax credit widened:Section 17 of the CGST Act has been amended to expand the scope of input tax credit to include motor vehicles having a capacity of more than 13 persons. Credit on other motor cars is also available if they are used for the specified purposes. Further, credit on health insurance, outdoor catering, etc. will be available if such services are required to be provided to employees by the assessee in terms of any law for the time being in force (e.g. Factories Act, labor laws, etc.).
  • Multiple registrations in one State:Earlier, separate registrations could be obtained in one State only if the assessee had distinct ‘business verticals’ in that State. This concept has been done away with by amending Section 25 and now, assessees may choose to obtain separate registrations in the same State irrespective of whether they qualify as distinct business verticals or not.
  • Flexibility in issuing debit/credit notes:Earlier, the law, as well as the GSTN portal, accepted a single credit note or debit note against one invoice. However, assessees faced practical difficulties since certain debit/credit notes were to be issued against thousands of invoices. Section 34 has been amended to permit issuance of a single debit/credit note against multiple invoices. This will obviate the difficulty faced by assessees, especially in the cement, steel and automobile industries
  • Simplification of GST returns:The GST Council approved putting in place system of filing a single monthly return in place of the existing 3 monthly returns. However, the existing system of filing GSTR-3B and GSTR-1 will remain in place until such a time the new monthly return is notified. Section 43A has been inserted in the CGST Act to carry out this change. However, this provision will not take effect from 1 February 2019 but will come into force only when the new system of returns is ready
  • Order of set-off: Section 49 of the CGST Act, SGST input tax credit can be set off against IGST liability only if CGST input tax credit balance is insufficient for this purpose. Hence, the order of set-off of input tax credit is strictly laid down under the CGST Act itself. Further, SGST or CGST credit balance can be utilized against IGST liability only after IGST balance has been exhausted. Earlier, while the law was ambiguous on this point, the GSTN portal allowed set-off of SGST only after CGST balance was exhausted
  • Transitional credit to exclude cesses: Section 140 of the CGST Act has been retrospectively amended to exclude cesses such as Krishi Kalyan Cess. This issue was hotly debated with the AAR denying the benefit of such credit in Re Kansai Nerolac Paints Ltd. [2018-VIL-11-AAR]
  • Amendment in place of supply provisions: The place of supply of transactions of transportation of goods to a place outside India will be the destination of goods in terms of the amendment made to Section 13 of the Integrated Goods and Services Tax Act, 2017 (the IGST Act). Consequently, the Indian logistics firm will be able to take advantage of this provision to claim export benefits. Further, the place of supply in case of job work services has been excluded from the performance-based rule. Hence, job workers based in India will be able to claim export benefits

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GST, a game-changer reform for logistics sector

GST, a game-changer reform for logistics sector

It has been 15 months since the rollout of what is considered one of India’s biggest tax reforms — the Goods and Services Tax (GST). But, we are already witnessing a major positive transition in the logistics sector.

Outsourcing and the value addition in the logistics sector is set to take off post-GST. Considering the double-digit growth, the logistics market would exceed $250 billion in the next two years. As per a recent survey, the Indian logistics sector provides livelihood to 22 million-plus people, which is expected to be over 40 million by 2020. The high rate of growth in the next couple of years is expected largely due to the implementation of GST.

GST has replaced at least 7 indirect tax heads and has eliminated the need for warehouse hubs across States. Further, GST has eliminated check posts across the nation and thereby waiting time, leading to at least 12-15% reduction in the turnaround time of trucks.

Better utilization of assets like vehicles and warehouses will lead to efficiency and increased productivity thus lowering overall cost. This would considerably benefit the supply chain directly and India’s growth indirectly.

The manufacturing and other services sectors have now started planning their supply chains, bearing in mind fleet cost and fast delivery, rather than tax structure and compliance.

Competitive edge

Pre-GST, the Indian logistics sector was struggling to add value to customers, compared to global peers. Indian firms were seen as labor contractors or mere transporters, which denied them the benefits of being a part of the supply chain. But the equation has changed now.

Manufacturers are looking to optimize supply chains and are willing to outsource value-added planning to logistics players, who have invested in technology and operate with a focus on quality and compliance. These logistics players are seeing a positive shift in the mindset of their clients and are gaining momentum. Further, small transporters can also now work with third-party logistics (3PL) providers and expand their fleet. GST has aided this move at a faster clip.

Post GST, there is a marked improvement in the use of technology and digitization by logistics players. 3PL players can become real ‘differentiators’ as they embrace technology to enhance the visibility of load carried, turn-around time, vehicle utilization, improvement in loading/unloading time by removing congestion at the docks, and the like.

Equipped with technology and software for load design solutions, vehicle geo-tracking, inventory (order/part level) tracking and route optimization, 3PL players add more value to their customers’ supply chain.

Logistics costs have been one of the biggest stumbling blocks for Indian manufacturers eyeing exports. At about 13-14% of GDP, India’s logistics cost is high and compares with about 8% in advanced nations that have efficient systems. This despite the percentage of outsourcing being higher in developed markets.

The Centre has made clear its intention to bring down this cost to less than 10%, which would make Indian manufacturers globally relevant.

The Centre created a new division in the Commerce Ministry to deal with the integrated development of logistics and urged all stakeholders to bring to India relevant best practices to enhance efficiency in logistics.

This is a good move as logistics firms used to deal with six different ministries separately and each would require separate paperwork and formalities. It is a big sense of relief to note there will soon be a system where a single document would be accepted for multi-modal logistics within India.

India has moved from the 54th position in 2014 to 44th in 2018 in the World Bank’s Logistics Performance Index.

Infrastructure status

The much-awaited ‘infrastructure’ status to the sector was conferred in November 2017, which is helping the sector avail cheaper finance (2% lower) for its warehousing and cold storage needs.

This will bring in a lot more players with an integrated service approach that would again help Indian manufacturers. New investments in this sector is good news as it could create a lot more jobs in the near future.

Together, the implementation of GST and other reforms have already started bringing efficiencies into the supply chain of various firms. Digitization, asset utilization, and visibility enhancement are facilitating better value-added outsourcing to logistics firms.

The government, too, has realized that aspirations for economic growth, employment generation, manufacturing, and exports are all inextricably linked to the efficient management of logistics.

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Source: The Hindu
Author: T V Sundram Iyengar 
GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

The Kerala High Court has directed the GST department to transfer the tax amount paid by the petitioner under a wrong head instead of another by mistake.

In the instant case, the goods transported by the petitioner was detained by the department and imposed tax and penalty on the same. To get the goods released, the petitioner agreed to pay the whole amount. However, the amount was paid under the head ‘SGST’ instead of ‘IGST.’

Before the High Court, the petitioners relied on Section 77 of the GST Act and also Rule 4(1) of the GST Refund Rules, 2017.

Section 77 provides for the refund of the tax paid mistakenly under one head instead of another. But Rule 4 speaks of adjustment. Where the amount of refund is completely adjusted against any outstanding demand under the Act, an order giving details of the adjustment is to be issued in Part A of FORM GST RFD-07. The petitioner’s counsel lays stress on this process of adjustment and asserts that the amount remitted under one head can be adjusted under another head, for the demand can be any amount under the Act.

Allowing the petition, Justice Dama Seshadri Naidu held that “Under these circumstances, I find no difficulty for the respondent officials to allow the petitioner’s request and get the amount transferred from the head ‘SGST’ to ‘IGST’. It may, as the Government Pleader has contended, take some time, but it is inequitable for the authorities to let the petitioner suffer on that count.”

“So I hold that the 2nd respondent will release the goods forthwith along with the vehicle and, then, ensure that the tax and penalty already stood remitted under the ‘SGST’ is transferred to the head ‘IGST’,” the Court said.

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Source: Tax Scan
Download Free – HSN Classification under GST E-Book

Download Free – HSN Classification under GST E-Book

Under Indirect Tax Laws, classification is the categorization of goods or services crucial to ascertain whether a subject matter is exigible to tax, exemption, the rate of tax etc. In GST regime, classification of goods has to be in accordance with Customs Tariff Act which is based on the Harmonized System of Nomenclature (HSN). The classification of services is based on the service code (tariff). Classification of goods or services is a complex procedure of ascertaining whether goods or services are composite, non-composite or mixed, and how to resolve competitive entries etc.

Also Read: Understanding HSN Codes and SAC Under GST

To provide some solution to these issues, the Indirect Taxes Committee of the ICAI has come out with “E-Handbook on classification under GST’. This e-publication inter alia covers meaning, need, principles/rules to be considered, steps to be followed etc. for aptly classifying goods/services. This e-handbook provides a deeper knowledge of provisions pertaining to Classification of goods and services under GST in a simplified manner along with relevant notifications issued and few judicial pronouncements.

Book Cover Following topics-

1. Introduction

2. Identification of Supply of Goods or Services

3. Classification of activities which are neither Supply of Goods nor Supply of Services

4. Identification of Composite Supplies or Mixed Supplies

5. Classification of goods as per Notification

6. General Rules of Interpretation

7. Classification Principles Evolved By Courts

8. Classification of Services as per Notification

Download Free e-book by ICAI on HSN Classification under GST

Filing GSTR-1 return using XaTTaX GST Software

Filing GSTR-1 return using XaTTaX GST Software

GSTR-1 Filing through XaTTaX GST Software

With GST filing around the corner, it becomes necessary for you to understand how to file your GSTR-1 return with simple steps using our state-of-the-art GST filing and reconciliation solution – XaTTaX.

  What is GSTR-1 return?

 GSTR-1 return needs to be filed by all individuals, who are registered under GST. The taxpayer needs to provide details of the outward returns (sales), upload and file the invoices with GSTN. The due date to file this return is 10th October 2017.

What do you need to report in your GSTR-1 return?

 As outlined earlier, GSTR-1 is a sales return and every tax payer has to mandatorily report the following set of information in this return:

  • Invoice summary that includes invoice types, credit notes and advance receipts
  • Summary of documents issued
  • Summary of HSN/SAC
  • Details of the turnover, which should be provided only once.

Now, let’s understand the procedure for filing the GSTR-1 return using XaTTaX:

  1. Login to XaTTaX as an accountant.

XaTTaX GST Software Login Page

Figure 1

  1. From the Home page, select the GSTIN that you want to access to direct you to the Dashboard.

Note: You can switch between different GSTINs from a single legal entity.

  1. In the Dashboard, you can view the analytics pertaining to various returns such as GSTR-1, GSTR-2, apart from other useful information such as list of activities, returns dates and XaTTaX updates.

XaTTaX GST Software Dashboard

Figure 2

  1. In the GSTR 1 – DATA IMPORT screen (appears when you click GSTR 1 -> Import in the left section), click Browse to choose the desired file and then click Import to import the GSTR-1 data in Tally or XaTTaX format (excel).

XaTTaX GST Software Dashboard GSTR 1

Figure 3

  1. Click Classify to classify the invoices into various categories such as B2B, B2C, etc and then click Submit for Approval.

 The invoices get routed to the manager for approval.

XaTTaX GST Software GSTR 1 Outward Transaction

Figure 4

  1. Once the manager approves the invoices, you can proceed to save, submit and file the GSTR-1 returns with GSTN.

This ends the process of filing the GSTR-1 return using XaTTaX, which is quite simple and ensures 100% security.

Also read: How to File GSTR 3B in Details and download GSTR 3B- Format.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

As Official Deadline Passes, Only 46 lakh File Final GST Returns for July

As Official Deadline Passes, Only 46 lakh File Final GST Returns for July

GST returnAbout 70% (46 lakh) of the assessees under the Goods and Services Tax (GST) had filed detailed sales returns for July as on Tuesday (October 10), the official deadline. Low compliance, said officials.

No further extension was given; the deadline had been extended twice earlier. About 4.59 million entities of the eligible 6.5 million filed the GSTR-1 return, for the first month of GST.

“We will assess why many people have not filed. We have already sent reminders to those who filed GSTR-3B, the summarised return form, but not GSTR-1,” said a GST Network (GSTN) official.

The deadline to file GSTR-1 was extended by a month from September 10 at the GST Council meeting last month in Hyderabad. Earlier, the deadline was extended from September 5 on account of technical issues with GSTN.

If a taxpayer fails to file GSTR-1 by the deadline, the buyer of his products would face difficulty in availing of input tax credit. Which is why, noted Pratik Jain, partner at consultancy PwC, the number of GSTR-1 returns are much lower than what one would have expected.

It is possible many dealers with GST registration have nil turnover and, hence, did not file the return. “The government will have to investigate the reasons and take corrective steps,” he added.

Three million returns had been filed as of September 10, the day after the announcement of the extension. About 1.5 million more returns were filed after that.

GSTR-1 has 13 sections containing details of sales transactions of a registered dealer for a month. A little more than 330 million invoices were filed and processed by the GST system along with the GSTR-1 of July. Of this, 73% were uploaded using the offline tool developed by GSTN; 16% of the invoices came through GST Suvidha Providers.

The inward supplies return or GSTR-2 for July has to be filed by October 31. And, GSTR-3 for the month by November 10. Once a taxpayer files GSTR-1, the government utilises the information to verify GSTR-3 for the dealer and GSTR-2A for dealers to whom supplies have been made.

Read: GST Council to discuss bringing real estate under its ambit: Arun jaitely

For the transition period, the government has allowed assessees to file self-summary returns for input-output, called GSTR-3B.

The lower-than-expected GSTR-3B returns filed in the first two months of GST implementation had prompted revenue secretary Hasmukh Adhia to ask central and state commissioners to urgently conduct a survey to know why. Only about 6% of those eligible filed GSTR-3B, for August; 84.2% did so for July. Of the 7.3 million eligible ones, 4.7 million filed the summarised return for August.

The questions suggested in the survey on why GSTR-3B was not filed are: The site was not functioning, filing process was too complicated, system didn’t allow me to file nil return and ‘could not’ preview return details before filing returns. In addition, tax officers will take suggestions for improving the returns filing process.

Last week, the GST Council, chaired by Union finance minister Arun Jaitley, eased compliance rules for small and medium enterprises. Those with annual turnover up to Rs 1.5 crore will from October onward need to file returns and pay taxes only quarterly, not monthly. It also raised the eligibility limit in terms of annual turnover to Rs 1 crore from the current Rs 75 lakh for the composition scheme, which allows a flat rate and easy compliance. The window will be open until March 31 next year.

Assessees are required to file and pay taxes only quarterly under the composition scheme. A trader pays at 1%, a manufacturer at 2% and a restaurant owner at 5% but they are not allowed input tax credit. About 90% of taxpayers under GST have annual turnover up to Rs 1.5 crore.

XatTaX: India’s most trusted GST compliance software – 100% accurate GST filing

Source: The Wire

Are businesses really facing problems or is it just another political stunt with GST?

Are businesses really facing problems or is it just another political stunt with GST?

Are businesses really facing problems or is it just another political stunt with GST?

Lately, we hear a lot of criticism from all sections of the society, particularly the traders, who are clamouring about the tax burden, compliance difficulties, obstacles in doing business and so on. However, the Government has a different take on this (GST) , which does not support any of these claims.

As per the latest (July) statistics from the Government, you will be surprised to note that 40% of the assessees pay nil tax, while the remaining 60% did not have cash liability of over Rs. 33,000. Now, let’s get into details.

In the July month, almost 54 lakh businesses filed their returns out of which 40% have claimed ‘nil’ tax liability, without paying a single penny. That implies, around 22 lakh businesses did not even pay a single rupee of GST. Among the remaining 60% of the population or roughly around 32 lakh businesses, many did not have the cash liability and accordingly they have opted to avail the credits available for service tax or excise that they had paid, before GST was introduced on July 1. Within this figure, close to 70% had a tax liability between Rs. 0 – 33,000. However, a small figure comprising of just 10,000 companies or 3% accounted for a major GST share, i.e., 2/3rd of the GST that the Government has collected in the month of July.

Also read: Why a service provider needs to register for GST across several states

Current status of the registered buyers

According to Finance Minister, Arun Jaitley, at present, close to one crore businesses and service providers have been registered, wherein 72 lakhs have migrated from the previous tax era, while 25 to 26 lakh new taxpayers have been added. He further added that over 94-95% of the collections were mopped from large assessees (with the turnover of over Rs. 1.5 crores), who make up roughly 10% of the overall registered taxpayers.

Then, why this criticism?

One of the senior officials has quoted that everyone is simply seeking exemptions, but most are not paying taxes. Political parties, on the other hand, are blaming the government for its poor implementation for the problems being faced by several quarters of taxpayers. However, the government on its part has its own version of why criticism has been mounted from various quarters. One reason is that earlier several entity were out of the tax purview or simply evading taxes, but are now coughed up to pay taxes. The government also admitted that as of now there were low tax collections, but in near future, the government is planning to widen the base and create space in the future, thereby reducing the tax rates.

Concept paper to help in tailoring the GST rates

In the recently concluded meeting on GST, Jaitley said that the GST council has decided on how rates would be determined in the future. He added that as revenue increases and based on the revenue neutrality situation in the future, rates will be tailored, as per the Concept paper, which has been approved.

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Mixed Supply and Composite Supply under GST

Mixed Supply and Composite Supply under GST


Mixed Supply Under GST

In Mixed supply two or more individual supplies combination of goods or services with each other for a single price. Each of these items can be supplied separately and is not dependent on each other. In other words, the combination of goods or services are not bundled due to natural necessities, and they can be supplied individually in the ordinary course of business.

For tax liability purpose, mixed supply consisting of two or more supplies shall be treated as a supply of that item which has the highest tax rate.


Many shops offer combo packs of Tie, watch wallet, pen and they are bundled as a kit and this kit is supplied for a single price and the supply of one item does not naturally necessitate the supply of other elements. Hence the supply is a mixed supply. Now let us assume that tax rate for a tie, watch, wallet, pen are 12%, 18%, 5%, 4% respectively. In this case, watch attracts the highest rate of tax in the mixed supply i.e., 18%. Hence, the mixed supply will be taxed at 18%.


Composite Supply Under GST

Composite supply consists of two or more goods/services, which is naturally supplied with each other in the ordinary course of business and one of them is a principal supply. The items cannot be supplied separately. In other words, goods and services are bundled owing to natural necessities. The elements in a composite supply of goods and services are dependent on the ‘principal supply’ of goods or services.

Principal supply means the supply of goods or services which constitute the predominant element of a composite supply and to which another supply is ancillary/secondary.

The following conditions are necessary for composite supply under GST:

  • Supply of two or more goods or services together, AND
  • It should be a natural bundle and they cannot be separated

Note:- If the second condition is not fulfilled then it becomes a mixed supply. For tax liability purposes, the tax rate applicable to the principal supply will be effected on the composite supply.


A Five-star hotel provides four days and three-night package, with breakfast. This is a composite supply as the package of accommodation facilities and breakfast is a natural combination in the ordinary course of business for a hotel. In this case, the hotel accommodation is the principal supply, and breakfast is ancillary to the hotel accommodation. Now, Let us assume, the hotel accommodation attracts 18% tax and the restaurant service attracts 12% tax. As per the example, hotel accommodation is the principal supply, and the entire supply will be taxed at 18%.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India