A circular has been issued regarding the change of TGST rates beginning from 1 July 2025.
The circular specifies that, pursuant to the seventh amendment to the Goods and Services Tax Act, the rate of tourism sector GST (TGST) will increase to 17% (seventeen percent) beginning from 1 July 2025. To this effect, the circular highlights that TGST must be charged at the new rate if the “time of supply” of a transaction occurs on or after 1 July 2025.
Through this circular, persons registered for GST in the tourism sector has been advised to take necessary action to bring any system changes beforehand that may be required to charge TGST at the new rate, and to have a ready arrangement to display the prices of goods and services inclusive of the new rate.
The cut-off times mentioned in this circular are as follows:
If a person registered in the tourism sector supplies goods and services on a 24-hour basis, the rate of TGST applicable to the value of supplies made before 00:00 hours on 1 July 2025 is 16% (sixteen percent), and the rate of TGST applicable to the value of supplies made on or after 00:00 hours on 1 July 2025 is 17% (seventeen percent).
Tourism sector GST registered persons other than those stated above are required to apply the rate of 17% (seventeen percent) to the value of supplies made from the time of opening their business on 1 July 2025.
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