Compliance KPIs for Hotels & Restaurants

The hospitality sector has the most layered indirect-tax structure in India. A guest at your property can trigger five GST rates at once: restaurant 5% with no ITC, banquet 18% with ITC, accommodation 12% or 18% (tariff-based), liquor under state excise (outside GST), and tour-package TCS at 5% if you bundle travel. Bill them as one restaurant invoice and you over-pay. Bill them right and you save 11–13 margin points on the same revenue.

The KPIs below assume a typical Maharashtra hotel with a restaurant attached. Adjust the rate stack if you run a pure restaurant or a non-AC dhaba.

1. Income Tax KPIs

The Income Tax Act 1961 — and the new Income Tax Act 2025 effective 1 April 2026 — keep the same pillars: pay advance tax on time, file an accurate return, and stay clean on cash. The KPIs below are the ones an audit officer pulls up first if your file lands on a scrutiny desk.

KPI / Compliance Item	Threshold & Action	Due Date	Source
Tax audit u/s 44AB	Turnover above Rs 1 crore. 44AD is rarely opted in this sector because of perishable inventory and ITC complexity.	30 Sep 2027	Sec 44AB
Advance tax	Watch the festival quarters carefully — Diwali, Christmas and the November-to-February wedding season distort the pattern.	Quarterly	Sec 208–211
Cash receipt cap (269ST)	Cannot accept more than Rs 2 lakh in cash for a single function (banquet, conference, wedding). Insist on card, UPI or cheque.	Continuous	Sec 269ST
Cash payment cap (40A(3))	Cash payment above Rs 10,000 per day per vendor is disallowed. Applies to vegetable mandi, fish market, daily-wage staff.	Continuous	Sec 40A(3)
ITR filing	ITR-5 for firms and LLPs, ITR-6 for companies. Partnership firms and Pvt Ltd companies dominate this sector.	31 Oct 2027	Sec 139(1)

2. TDS KPIs

TDS payments are due by the 7th of the next month (March is 30 April), and quarterly Form 26Q or 27EQ returns drive Form 16 / 16A on TRACES. Late filing of the return alone costs Rs 200 per day under Sec 234E.

KPI / Compliance Item	Threshold & Action	Due Date	Source
194C — Housekeeping, laundry, catering	1% / 2% on payments above Rs 30,000 per bill or Rs 1 lakh aggregate.	7th of next month	Sec 194C
194I — Property and banquet hall hire received	10% on rent above Rs 2.4 lakh in the FY.	7th of next month	Sec 194I
194Q — Liquor and F&B procurement above Rs 50 lakh from one supplier	0.1% if your turnover above Rs 10 crore.	7th of next month	Sec 194Q
194H — OTA and travel agent commission	5% on commission paid to MakeMyTrip, Booking.com or local agents above Rs 15,000 in the FY.	7th of next month	Sec 194H
206C(1G) — Tour package TCS	5% TCS on overseas tour package sold (any value), 0.1% on inbound packages above Rs 7 lakh.	7th of next month	Sec 206C(1G)
Quarterly returns (26Q / 27EQ)	Late filing alone costs Rs 200 per day under 234E.	31 Jul, 31 Oct, 31 Jan, 31 May	Rule 31A / 31AA

3. GST KPIs

GST is the most data-rich compliance regime — every invoice you raise and every invoice you receive sits on the network. Use GSTR-2B, not 2A, as your reconciliation base from FY 2022-23 onwards.

KPI / Compliance Item	Threshold & Action	Due Date	Source
Standalone restaurant (AC or non-AC)	5% without ITC.	Continuous	Notification 46/2017-CT(R)
Restaurant inside hotel with declared tariff above Rs 7,500 / day	18% with ITC.	Continuous	Notification 11/2017-CT(R) Item 6(b)
Hotel accommodation	Up to Rs 1,000 — Exempt. Rs 1,001–7,500 — 12%. Above Rs 7,500 — 18% (per declared tariff per night).	Continuous	Notification 11/2017-CT(R) Item 7
Outdoor catering and banquet	18% with ITC if at premises with declared tariff above Rs 7,500. Otherwise 5% without ITC.	Continuous	Notification 13/2018-CT(R)
Liquor sale	Outside GST. Falls under State Excise and State VAT (Maharashtra State Excise plus VAT 5/20/25%).	Continuous	Sec 9 CGST + State Excise Acts
E-invoicing	If aggregate turnover above Rs 5 crore. Applies to B2B invoices and corporate banquet bookings only.	Every B2B invoice	Rule 48(4)
GSTR-1 / 3B	Monthly.	11th / 20th	Sec 37 / 39
GSTR-9 / 9C	Annual return plus reconciliation if turnover above Rs 5 crore.	31 Dec 2027	Sec 44

4. Profession tax (Maharashtra)

Profession Tax is a state levy run by the Maharashtra Goods & Services Tax Department. There are two registrations and most businesses need both — one for the owner, one for the staff.

Registration	Who needs it / what you pay	Due date	Source
PTEC (Enrolment)	For the proprietor, partner, director, LLP or company. Flat Rs 2,500 per year for most non-salaried professions and businesses.	30 June	MahaGST PT Act 1975
PTRC (Registration)	For employers paying salary above Rs 7,500 p.m. (male) or Rs 25,000 p.m. (female). Slabs: Rs 175 p.m. for Rs 7,501–10,000 (male); Rs 200 p.m. plus Rs 300 in February if salary exceeds Rs 10,000. Annual ceiling Rs 2,500 per employee.	Last day of the next month	MahaGST PT Rules

5. Bookkeeping and the filing system

Section 44AA of the Income Tax Act and Section 35 (read with Rule 56) of the CGST Act set the bookkeeping baseline. For most non-professional businesses, books are required if income is above Rs 2.5 lakh or turnover above Rs 25 lakh in any of the three preceding years.

Minimum books to keep

• Cash book, bank book, journal and ledger — daily, on accrual basis (Sec 145 read with ICDS).
• Sales register and purchase register — invoice-wise, with HSN/SAC and GST.
• Stock register — opening, receipts, issues, closing. Mandatory under CGST Rule 56(2).
• Bills, vouchers, e-way bills and delivery challans behind every entry.
• Fixed asset register, block-wise, with the date the asset was put to use.
• TDS / TCS certificates downloaded from TRACES.
• Daily occupancy and ARR (average room rate) register, used to determine the declared-tariff GST rate.
• Function diary and banquet contract file, with a separate ledger per event for food, hall hire, decor and beverages.
• FSSAI and liquor licence register with annual renewal fee challans.
• Service-charge ledger separating voluntary tip from mandatory service charge (CCPA Guidelines 2022).

How long to keep them

• Income Tax: 6 years from the end of the relevant Assessment Year (Sec 149). For reopened or search cases, up to 10 years.
• GST: 72 months from the due date of the annual return for the year (CGST Sec 36).
• Companies and LLPs: 8 financial years (Sec 128 Companies Act 2013 / corresponding LLP rules).

6. Sector-specific compliance traps

The four mistakes our team sees most often when we take over books from another firm:

7. Annual compliance calendar (FY 2026-27)

Month	Compliance milestones
April	TDS payment for March (30 Apr); GSTR-1 / 3B for March; PT employee deduction.
May	Q4 TDS return Form 26Q (31 May); Form 16A; SFT-005 / 61A (31 May).
June	Form 16 to employees (15 Jun); Q1 advance tax (15 Jun); PTEC payment (30 Jun).
July	Q1 TDS return (31 Jul); ITR for non-audit cases (31 Jul); QRMP option last month.
August	Routine GSTR-1 / 3B; e-invoice review.
September	Tax audit report u/s 44AB (30 Sep); Form 10B / 10BB (30 Sep) for trusts; Q2 advance tax (15 Sep).
October	Q2 TDS return (31 Oct); ITR for audit cases (31 Oct); GSTR-9 prep starts.
November	ITR for transfer-pricing cases (30 Nov).
December	Q3 advance tax (15 Dec); GSTR-9 / 9C filing (31 Dec).
January	Q3 TDS return (31 Jan); books reconciliation for FY closing.
February	Stock-take preparation; PT special slab (Rs 300 in Feb).
March	Q4 advance tax (15 Mar); Annexure V for GTAs (31 Mar); books closure; year-end TDS.