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.
EVM Motors and Vehicles, a car dealership that had expanded into the hospitality industry, requested this judgement. 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, however alcohol was priced individually if served.
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 categorised as “passenger transport services.”
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 have been hard hit by the current pandemic, will be relieved by this ruling, which clarifies ITC claims.
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