First major relief: Rajasthan to reimburse tax to hotels and tour operators

The Rajasthan government has decided to reimburse the state tax, due and deposited, by hotels and tour operators registered under the Rajasthan Goods and Services Act. The order for reimbursement of state tax (SGST) will come into effect from April 1 and will be in force till June 30.

The order will be applicable for taxable entities registered under the category of hotels, resorts and tour operators. However, it will not cover standalone restaurants and clubs.

The corona virus outbreak has broken the backbone of the travel and tourism industry and all stakeholders have been requesting the central and state governments for various benefits. Rajasthan is the first state to extend such a help to the industry. The order was passed on March 23.

The order said that if any beneficiary is found guilty of any kind of evasion in the preceding financial year, he or she will not be entitled for reimbursement. If it is found that a beneficiary has wrongly availed the reimbursement under this order, the same will be recovered as a sales tax arrear along with an interest at the rate of 18% per annum and a penalty equal to the amount wrongly availed of.

Earlier this month, Rajasthan had become probably the first state to announce a complete lockdown. It barred essential goods and medical services from March 22-31 to contain the spread of the virus. The state is one of the most popular tourism destinations in India, along with Kerala and Goa.

The industry is hoping that other states will follow suit.