The Hotel-Receipts Tax Act, 1980

 
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THE HOTEL-RECEIPTS TAX ACT, 1980 ACT NO. 54 OF 1980

[9th December, 1980.]

An Act to impose a special tax on gross receipts of certain hotels.

BE it enacted by Parliament in the Thirty-first Year of the Republic of India as follows:--

  1. Short title and extent.

  2. Short title and extent. (1) This Act may be called the Hotel-

    Receipts Tax Act, 1980.

    (2) It extends to the whole of India.

  3. Definitions.

  4. Definitions. In this Act, unless the context otherwise requires,--

    (1) "assessee" means a person by whom hotel-receipts tax or any other sum of money is payable under this Act and includes--

    (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his chargeable receipts or of the amount of refund due to him or of the chargeable receipts of any other person in respect of which he is assessable or of the amount of refund due to such other person;

    (b) every person who is deemed to be an assessee in default under any provision of this Act;

    (2) "assessment" includes reassessment;

    (3) "assessment year" means the period of twelve months commencing on the 1st day of April every year;

    (4) "Board" means the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963);

    348 (5) "chargeable receipts" means the total amount of all charges referred to in section 6, computed in the manner laid down in section 7;

    (6) "hotel" includes a building or part of a building where residential accommodation is, by way of business, provided for a monetary consideration;

    (7) "hotel-receipts tax" or "tax" means the tax chargeable under the provisions of this Act;

    (8) "Income-tax Act" means the Income-tax Act, 1961 (43 of 1961);

    (9) "prescribed" means prescribed by rules made under this Act;

    (10) "room charges" means the charges for a unit of residential accommodation in a hotel and includes the charges for--

    (a) furniture, air-conditioner, refrigerator, radio, music, telephone, television, and (b) such other services as are normally included by a hotel in room rent, but does not include charges for food, drink and any services other than those referred to in sub-clauses (a) and (b);

    (11) all other words and expression used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act.

  5. Application of the Act.

  6. Application of the Act. (1) Subject to the provisions of sub-

    section (2) and sub-section (3), this Act shall apply in relation to every hotel wherein the room charges for residential accommodation provided to any person at any time during the previous year are seventy-five rupees or more per day per individual.

    Explanation.--Where the room charges are payable otherwise than on daily basis or per individual, then the room charges shall be computed as for a day and per individual based on the period of occupation of the residential accommodation for which the charges are payable and the number of individuals ordinarily permitted to occupy such accommodation according to the rules and custom of the hotel.

    (2) Where a composite charge is payable in respect of residential accommodation and food, the room charges included therein shall be determined in the prescribed manner.

    (3) Where--

    (i) a composite charge is payable in respect of residential accommodation, food, drink and other services, or any of them, and the case is not covered by the provisions of sub-section (2), or (ii) it appears to the Income-tax Officer that the charges for residential accommodation, food, drink or other services are so arranged that the room charges are understated and the other charges are overstated, the Income-tax Officer shall, for the purposes of sub-section (1), determine the room charges on such reasonable basis as he may deem fit.

    349 4.

    Tax authorities.

  7. Tax authorities. (1) Every Director of Inspection, Commissioner of Income-Tax, Commissioner of Income-tax (Appeals), Inspecting Assistant Commissioner of Income-tax, Officer and Inspector of Income-tax shall have the like powers and perform the like functions under this Act as he has and performs under the Income-tax Act, and for the exercise of his powers and the performance of his functions, his jurisdiction under this Act shall be the same as he has under the Income-tax Act.

    (2) All officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Board:

    Provided that no such orders, instructions or directions shall be issued--

    (a) so as to require any tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner (Appeals) in the exercise of his appellate functions.

    (3) Every Income-tax Officer employed in the execution of this Act shall observe and follow the orders, instructions and directions issued for his guidance by the Director of Inspection or by the Commissioner or by the Inspecting Assistant Commissioner within whose jurisdiction he performs his functions.

  8. Charge of tax.

  9. Charge of tax. (1) Subject to the provisions of this Act, there shall be charged on every person carrying on the business of a hotel in relation to which this Act applies, for every assessment year commencing on or after the 1st day of April, 1981, a tax in respect of his chargeable receipts of the previous year at the rate of fifteen per cent. of such receipts:

    Provided that where such chargeable receipts include any charges received in foreign exchange, then, the tax payable by the assessee shall be reduced by an amount equal to five per cent. of the charges (exclusive of the amounts payable by way of sales tax, entertainment tax, tax on luxuries or tax under this Act) so received in foreign exchange.

    Explanation.--For the purposes of this sub-section,--

    (a) charges received in Indian currency obtained by conversion of foreign exchange into Indian currency shall, in such cases and in such circumstances as may be prescribed, be deemed to have been received in foreign exchange; and (b) "foreign exchange" and "Indian currency" shall have the meanings respectively assigned to them in clauses (h) and (k) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973).

    (2) Where, under an arrangement made between a person carrying on the business of a hotel to which this Act applies and any other person having close connection with him, any food, drink or other services is or are provided on the premises of such hotel by the second-mentioned person and the Income-tax Officer is of opinion that such arrangement has been made with a view to avoiding or reducing the liability under this Act by the first-mentioned person, then, (a) the second-mentioned person shall also be deemed to be a person carrying on the business of a hotel to which this Act applies; and (b) hotel-receipts tax shall be charged on the second-

    mentioned person in respect of charges for food, drink or other services so provided by him as if such charges were the chargeable receipts of the 350 business of a hotel deemed to be carried on by him under clause (a), and all the provisions of this Act shall apply accordingly.

    Explanation.--For the purposes of this sub-section,--

    (i) a close connection shall be deemed to exist between a person carrying on the business of a hotel and another person if, in relation to the person carrying on the business of a hotel, such other person is a person referred to in clause (b) of sub-

    section (2) of section 40A of the Income-tax Act;

    (ii) any food, drink or other service shall be deemed to have been provided on the premises of a hotel if the same is or are provided in the hotel or any place appurtenant thereto and where the hotel is situate in a part of building, in any other part of the building.

  10. Scope of chargeable receipts.

  11. Scope of chargeable receipts. (1) Subject to the provisions of this Act, the chargeable receipts of any previous year of an assessee shall be the total amount of all charges, by whatever name called, received by, or accruing or arising to, the assessee in connection with the provision of residential accommodation, food, drink and other services or any of them (including such charges from persons not provided with such accommodation 1*[but excluding such charges from persons within] the purview of the Vienna Convention on Diplomatic Relations, 1961 or the Vienna Convention on Consular Relations, 1963 in the course of carrying on the business of a hotel to which this Act applies and shall also include every amount collected by the assessee by way of tax under this Act, sales tax, entertainment tax and tax on luxuries.

    (2) For the removal of doubts, it is hereby declared that where any such charges have been included in the chargeable receipts of any previous year as charges accruing or arising to the assessee during that previous year, such charges shall not be included in the chargeable receipts of any subsequent previous year in which they are received by the assessee.

  12. Computation of chargeable receipts.

  13. Computation of chargeable receipts. (1) Subject to the provisions of sub-section (2), the following deductions shall be allowed in computing the chargeable receipts of any previous year--

    (i) the amount of charges accruing or arising in an earlier previous year which is established to have become a bad debt during the previous year:

    Provided that such charges have been taken into account in computing the chargeable receipts of the assessee of any earlier previous year and the amount has been written off as irrecoverable in the accounts of the assessee for the previous year during which it is established to have become a bad debt;

    (ii) any amount payable by way of sales tax, entertainment tax or tax on luxuries in respect of any charges included in the chargeable receipts of the previous year;

    (iii) the amount of tax chargeable under this Act.

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