The Goods and Services Tax (GST) regime has caused uncertainties for the thousands of homestays, a key component of Kerala’s tourism industry.
The GST rules are silent on homestays. But the stipulation that hotel rooms with rents upwards of ₹1,000 should be charged the tax has put the homestay owners in a spot.
“If the GST applies to homestays, then it will be a disaster for the sector,” Sivadattan, director, Kerala Homestay and Tourism Society (HATS), told The Hindu . He said homestays were home-based tiny enterprises with two to six rooms and run mostly by family members.
The business, relying on tourists, was seasonal, from September to March Already, the homestays were paying many government agencies on a variety of counts, including for the pollution-free certificate.
Mr. Sivadattan said the stipulation that all enterprises with an annual turnover of ₹20 lakh need to get themselves registered and pay the GST would not affect the huge majority of homestays. Very few homestays could rake in ₹20 lakh.
The GST rollout has unexpectedly hit the homestays in a different way. He pointed out that these days tourists booked accommodation online through web-based hospitality services such as Bookmytrip, Booking.com and Airbnb.
These agencies were now insisting on quoting the GST number for signing on with them. So, the dilemma the homestays were facing now was whether to register with the GST regime or not. If they register with the GST, the tax would fall on them.
Fort Kochi is considered the homestay capital of Kerala, followed by Munnar, Alappuzha and Wayanad. The Kerala HATS has called a meeting of its members in mid-July to discuss the GST issue and has urged senior Central Excise officials to guide them on the tax.
