{"id":29913,"date":"2025-09-12T14:13:28","date_gmt":"2025-09-12T08:43:28","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29913"},"modified":"2026-02-20T17:06:53","modified_gmt":"2026-02-20T11:36:53","slug":"gst-rate-on-hospitality-industry-hotel-rooms-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/","title":{"rendered":"GST rate on Hospitality Industry\/ Hotel Rooms in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d49bf9996ed\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d49bf9996ed\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#GST_rate_on_Hospitality_Industry_Hotel_Rooms_in_India\" title=\"GST rate on Hospitality Industry\/ Hotel Rooms in India\">GST rate on Hospitality Industry\/ Hotel Rooms in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Hospitality_Tourism_Under_Pre-GST\" title=\"Hospitality &amp; Tourism Under Pre-GST \">Hospitality &amp; Tourism Under Pre-GST <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Before_GST_hotels_and_restaurants_were_subject_to_multiple_taxes_%E2%80%94_VAT_Luxury_Tax_and_Service_Tax\" title=\"Before GST, hotels and restaurants were subject to multiple taxes \u2014 VAT, Luxury Tax, and Service Tax.\">Before GST, hotels and restaurants were subject to multiple taxes \u2014 VAT, Luxury Tax, and Service Tax.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Historical_GST_Rates_till_Sept_2019\" title=\"Historical GST Rates (till Sept 2019)\">Historical GST Rates (till Sept 2019)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#GST_Rate_Revision_on_Hotel_Room_Tariffs_Effective_22nd_Sept_2025\" title=\"GST Rate Revision on Hotel Room Tariffs Effective 22nd Sept 2025\">GST Rate Revision on Hotel Room Tariffs Effective 22nd Sept 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Revised_GST_Slabs_for_Room_Tariffs-_New_Rule_effective_22nd_Sept_2025\" title=\"Revised GST Slabs for Room Tariffs- New Rule (effective 22nd Sept 2025) :\">Revised GST Slabs for Room Tariffs- New Rule (effective 22nd Sept 2025) :<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Applicability_of_GST_Based_on_Booking_Dates\" title=\"Applicability of GST Based on Booking Dates\">Applicability of GST Based on Booking Dates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#New_GST_Rates_on_Hotel_Rooms_Effective_22_Sept_2025\" title=\"New GST Rates on Hotel Rooms (Effective 22 Sept 2025)\">New GST Rates on Hotel Rooms (Effective 22 Sept 2025)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Impact_on_Revision_on_Hotel_Room_Tariffs_Effective_22nd_Sept_2025\" title=\"Impact on Revision on Hotel Room Tariffs Effective 22nd Sept 2025\">Impact on Revision on Hotel Room Tariffs Effective 22nd Sept 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Mid-range_hotels_benefited_Luxury_hotels_saw_negligible_change\" title=\"Mid-range hotels benefited &amp; Luxury hotels saw negligible change.\">Mid-range hotels benefited &amp; Luxury hotels saw negligible change.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Pros_of_GST_for_Hospitality_%E2%80%93_Impact_on_Hospitality_Industry\" title=\"Pros of GST for Hospitality &#8211;\u00a0Impact on Hospitality Industry\">Pros of GST for Hospitality &#8211;\u00a0Impact on Hospitality Industry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Cons_of_GST_for_Hospitality\" title=\"Cons of GST for Hospitality\">Cons of GST for Hospitality<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Action_Required_from_Hotels_restaurant_spa_banquet_or_these_Services_prover_Organization\" title=\"Action Required from Hotels, restaurant, spa, banquet or these Services prover Organization\">Action Required from Hotels, restaurant, spa, banquet or these Services prover Organization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/gst-rate-on-hospitality-industry-hotel-rooms-in-india\/#Conclusion_%E2%80%93_In_Summary\" title=\"Conclusion &#8211;\u00a0In Summary \">Conclusion &#8211;\u00a0In Summary <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-28382\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/GST_4_Blog.jpg\" alt=\"GST_Blog\" width=\"951\" height=\"498\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/GST_4_Blog.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/GST_4_Blog-300x157.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/GST_4_Blog-768x402.jpg 768w\" sizes=\"(max-width: 951px) 100vw, 951px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"GST_rate_on_Hospitality_Industry_Hotel_Rooms_in_India\"><\/span><span style=\"color: #000080;\"><strong>GST rate on Hospitality Industry\/ Hotel Rooms in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The hospitality &amp; tourism industry in India is expected to rise from INR 15.24 lakh crore (US$ 234.03 billion) in 2017 to INR 32.05 lakh crore (US$ 492.21 billion) by 2028. Implementation of GST has helped the sector by reducing costs for customers, harmonising taxes, and lowering transaction costs for businesses however it also presents compliance challenges.<\/p>\n<p><span style=\"color: #333333;\">Hospitality <span style=\"font-size: 16px;\">industry still faces challenges with compliance technology, parity with global tourism hubs, and adapting to frequent rate revisions. However, in the long run, GST is expected to enhance India\u2019s hospitality competitiveness by offering customers a more transparent and efficient tax structure.<\/span><\/span><\/p>\n<p>GST has streamlined the taxation system for the hospitality sector, reduced cascading taxes, and improved ITC availability.<\/p>\n<p>56th GST Council Meeting (Sept 2025) announced that GST on hotel accommodation services up to INR 7,500 per unit per day will be reduced from 12% to 5%, effective 22nd September 2025. While budget and mid-segment hotels gain under the revised 5% GST slab (effective 22nd Sept 2025), luxury accommodations continue with 18%. i.e tariffs above INR 7,500\/night remains at 18%. Notification from CBIC is awaited before PMS\/OTA updates are fully implemented.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hospitality_Tourism_Under_Pre-GST\"><\/span><span style=\"color: #000080;\"><strong>Hospitality &amp; Tourism Under Pre-GST <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Before_GST_hotels_and_restaurants_were_subject_to_multiple_taxes_%E2%80%94_VAT_Luxury_Tax_and_Service_Tax\"><\/span><span style=\"color: #000080;\"><strong>Before GST, hotels and restaurants were subject to multiple taxes \u2014 VAT, Luxury Tax, and Service Tax.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Hotels with tariffs above INR 1,000\/night attracted Service Tax @15% (effective 9% after 40% abatement). VAT ranged 12\u201314.5%, with luxury tax on top. Restaurants enjoyed 60% abatement, making effective service tax ~6% on F&amp;B, in addition to VAT. Bundled services (seminars, marriages, events) had 30% abatement.<\/p>\n<p>GST simplified the structure by Applying standardised rates based on room tariff. Allowing Input Tax Credit (ITC) across goods &amp; services. Taxing bundled services (e.g., complimentary breakfast) under a single rate.<\/p>\n<p>Current GST Slabs (till 21st Sept 2025)<\/p>\n<table style=\"height: 316px;\" width=\"848\">\n<thead>\n<tr>\n<td>Room Tariff (per night)<\/td>\n<td>GST Rate<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Less than INR 1,000<\/td>\n<td>Nil<\/td>\n<\/tr>\n<tr>\n<td>INR 1,000 \u2013 INR 7,500<\/td>\n<td>12%<\/td>\n<\/tr>\n<tr>\n<td>INR 7,501 and above<\/td>\n<td>18%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Hotels with tariff above INR 7,500\/day are \u201cSpecified Premises\u201d. Restaurant services in such hotels attract 18% GST with ITC.<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Historical_GST_Rates_till_Sept_2019\"><\/span><span style=\"color: #000080;\"><strong>Historical GST Rates (till Sept 2019)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 397px;\" width=\"934\">\n<thead>\n<tr>\n<td>Tariff per Night<\/td>\n<td>GST Rate<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>&lt; INR 1,000 (religious\/charitable premises)<\/td>\n<td>Nil<\/td>\n<\/tr>\n<tr>\n<td>INR 1,000 \u2013 INR 2,499.99<\/td>\n<td>12%<\/td>\n<\/tr>\n<tr>\n<td>INR 2,500 \u2013 INR 7,499.99<\/td>\n<td>18%<\/td>\n<\/tr>\n<tr>\n<td>\u2265 INR 7,500<\/td>\n<td>28%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Pre-GST bills had multiple taxes (Service Tax, VAT, Luxury Tax). GST unified them. Drawback is Cascading taxes increased end costs, and input tax credit was unavailable across state vs. central levies.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"GST_Rate_Revision_on_Hotel_Room_Tariffs_Effective_22nd_Sept_2025\"><\/span><span style=\"color: #000080;\"><strong>GST Rate Revision on Hotel Room Tariffs Effective 22nd Sept 2025<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>GST on Hotel Rooms 2026: New Rates &amp; Impact on Hospitality Industry:\u00a0<\/strong><\/span><\/p>\n<p>This article reviews the impact of GST on the hospitality industry, including the latest updates from the 56th GST Council meeting. As per the recent announcement by the GST Council, effective 22nd September 2025, GST rates applicable on hotel room tariffs will change. These revisions will impact bookings created in Orgination \/ company GST tax Software \/ accounting Software tax \u00a0reservations, and other booking sources. New GST rates on hotel rooms effective 22nd September 2025 along with examples. It reinforces the same point as the GST Council press release you mentioned earlier:<\/p>\n<p>From boutique hotels to large hospitality chains, the Indian hotel industry plays a major role in the service economy. The 56th GST Council Meeting introduced important changes to GST on hotel accommodation, effective 22nd September 2025, impacting pricing, ITC eligibility, and restaurant taxation within hotels. Let\u2019s break it down clearly. Key Takeaways of 56th GST Council Meeting<\/p>\n<p>GST reduced from 12% to 5% for room tariffs up to \u20b97,500 per day, No ITC allowed at 5% rate, Rooms above \u20b97,500 continue at 18% with ITC, Restaurant services taxed differently based on \u201cspecified premises\u201d classification, ITC reversal required for mixed-category hotels under Rule 42 of CGST Rules<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Revised_GST_Slabs_for_Room_Tariffs-_New_Rule_effective_22nd_Sept_2025\"><\/span><span style=\"color: #000080;\"><strong>Revised GST Slabs for Room Tariffs- New Rule (effective 22nd Sept 2025) :<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Please review the details carefully to ensure compliance and avoid billing discrepancies<strong>. <\/strong><\/p>\n<ul>\n<li>Room tariff up to INR 7,500\/night : GST reduced from 12% to 5%<\/li>\n<li>Room tariff Above INR 7,500\/night : GST remains unchanged at 18%<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Applicability_of_GST_Based_on_Booking_Dates\"><\/span><span style=\"color: #000080;\"><strong>Applicability of GST Based on Booking Dates<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<td><strong>Booking Creation Date<\/strong><\/td>\n<td><strong>Check-in Date<\/strong><\/td>\n<td><strong>Room Tariff<\/strong><\/td>\n<td><strong>GST Rate Applicable<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Before 22nd Sept 2025 (or before final notice)<\/td>\n<td>Any date<\/td>\n<td>Up to INR 7,500\/night<\/td>\n<td>12%<\/td>\n<\/tr>\n<tr>\n<td>Before 22nd Sept 2025 (or before final notice)<\/td>\n<td>Any date<\/td>\n<td>Above INR 7,500\/night<\/td>\n<td>18%<\/td>\n<\/tr>\n<tr>\n<td>On\/after 22nd Sept 2025<\/td>\n<td>On\/after 22nd Sept 2025<\/td>\n<td>Up to INR 7,500\/night<\/td>\n<td>5%<\/td>\n<\/tr>\n<tr>\n<td>On\/after 22nd Sept 2025<\/td>\n<td>On\/after 22nd Sept 2025<\/td>\n<td>Above INR 7,500\/night<\/td>\n<td>18%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Any modification or re-saving of an existing booking (created before 22nd September) with check-in after 22nd September will trigger recalculation as per the new GST slabs. \u00a0Example: If occupancy or tariff is updated, GST will be re-applied at 5% or 18% as per the revised rules.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"New_GST_Rates_on_Hotel_Rooms_Effective_22_Sept_2025\"><\/span><span style=\"color: #000080;\"><strong>New GST Rates on Hotel Rooms (Effective 22 Sept 2025)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 251px;\" width=\"846\">\n<thead>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Description<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>GST Rate<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>ITC Availability<\/strong><\/span><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Room tariff \u2264 INR 7,500 per day<\/td>\n<td>5%<\/td>\n<td>Not allowed<\/td>\n<\/tr>\n<tr>\n<td>Room tariff &gt; INR 7,500 per day<\/td>\n<td>18%<\/td>\n<td>Allowed<\/td>\n<\/tr>\n<tr>\n<td>Restaurant services \u2013 Non-specified premises<\/td>\n<td>5%<\/td>\n<td>Not allowed<\/td>\n<\/tr>\n<tr>\n<td>Restaurant services \u2013 Specified premises<\/td>\n<td>18%<\/td>\n<td>Allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u201cSpecified Premises\u201d means A hotel is considered a specified premises if At least one room exceeded INR 7,500 per night in the previous financial year, OR The hotel voluntarily opts for specified status via declaration. Because restaurant and catering GST rates depend on this classification.<\/p>\n<p><strong>GST on Different Types of Accommodation<\/strong><\/p>\n<p>Specified Premises<\/p>\n<ul>\n<li>Rooms \u2264 INR 7,500 \u2192 5% (No ITC)<\/li>\n<li>Rooms &gt; INR 7,500 \u2192 18% (With ITC)<\/li>\n<li>Food &amp; beverage services \u2192 18% (With ITC)<\/li>\n<\/ul>\n<p><strong>Non-Specified Premises<\/strong><\/p>\n<ul>\n<li>Rooms \u2192 5% (No ITC)<\/li>\n<li>Restaurant services \u2192 5% (No ITC)<\/li>\n<\/ul>\n<p><strong>Residential Use<\/strong><\/p>\n<ul>\n<li>Renting for personal use \u2192 Generally GST exempt<\/li>\n<li>Renting to registered business \u2192 GST applicable<\/li>\n<\/ul>\n<p><strong>Religious &amp; Charitable Use : Exempt unless exceeding:<\/strong><\/p>\n<ul>\n<li>INR 1,000 per night (rooms)<\/li>\n<li>INR 10,000 per day (venue)<\/li>\n<li>INR 10,000 per month (shops)<\/li>\n<\/ul>\n<p>GST on Food, Banquets &amp; Additional Services, GST depends on whether services are provided in specified premises:<\/p>\n<table style=\"height: 114px;\" width=\"781\">\n<thead>\n<tr>\n<td>Type<\/td>\n<td>GST<\/td>\n<td>ITC<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Food at specified premises<\/td>\n<td>18%<\/td>\n<td>Allowed<\/td>\n<\/tr>\n<tr>\n<td>Food at non-specified premises<\/td>\n<td>5%<\/td>\n<td>Not allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Hotels operating mixed models must maintain careful segregation of accounts.<\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Impact_on_Revision_on_Hotel_Room_Tariffs_Effective_22nd_Sept_2025\"><\/span><span style=\"color: #000080;\"><strong>Impact on <\/strong><\/span><span style=\"color: #000080;\"><strong>Revision on Hotel Room Tariffs Effective 22nd Sept 2025<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Company shall continue to display their own configured tax rates until they receive and implement the official government notification. GST rate after 22nd September, the new GST slabs will apply automatically. GST impact will follow the same date-based logic. Any change after 22nd September for check-ins post 22nd September will trigger recalculation of GST.<\/li>\n<li>Final GST Dept change will be immediately come after the government notification. Taxpayers must review all upcoming reservations, understand the new GST applicability, and verify GST tax Software \/ accounting Software tax configurations to ensure a smooth transition.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Impact Examples \u2013 Pre vs Post GST<\/strong><\/span><\/p>\n<table style=\"height: 325px;\" width=\"879\">\n<thead>\n<tr>\n<td>Particulars<\/td>\n<td>Before GST<\/td>\n<td>After GST<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Room tariff INR 2,700 + taxes<\/td>\n<td>INR 3,213<\/td>\n<td>INR 3,024<\/td>\n<\/tr>\n<tr>\n<td>Room + Breakfast (INR 2,200 + INR 500)<\/td>\n<td>INR 3,191<\/td>\n<td>INR 3,024<\/td>\n<\/tr>\n<tr>\n<td>Room INR 8,000 + Breakfast INR 2,500<\/td>\n<td>INR 12,383<\/td>\n<td>INR 12,390<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Mid-range_hotels_benefited_Luxury_hotels_saw_negligible_change\"><\/span><span style=\"color: #000080;\"><strong>Mid-range hotels benefited &amp; Luxury hotels saw negligible change.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Lower tariffs (budget\/mid-segment hotels) benefit significantly. Luxury accommodations (above INR 7,500\/night) see no change. Discounts bringing tariffs below INR 7,500\/night will qualify for the reduced 5% GST. Complimentary services bundled with rooms (like breakfast, Wi-Fi, etc.) are included in tariff for GST computation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pros_of_GST_for_Hospitality_%E2%80%93_Impact_on_Hospitality_Industry\"><\/span><span style=\"color: #000080;\"><strong>Pros of GST for Hospitality &#8211;\u00a0<\/strong><strong>Impact on Hospitality Industry<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Benefit for Travelers : A INR 7,500 room earlier at 12% GST cost INR 8,400. Now at 5%, it costs INR 7,875. Savings = INR 525 per night. This is a noticeable price drop for Domestic tourists, Corporate bookings, Tier-2 &amp; Tier-3 city hotels. Impact on Hotels : While lower GST improves demand, the lack of ITC at 5% means Higher input cost burden, Need for ITC reversal under Rule 42, More accounting complexity. Hotels with both 5% and 18% categories must proportionately reverse ITC on common inputs.\u00a0 GST Calculation Examples<\/p>\n<p>Room Tariff \u20b96,000<\/p>\n<ul>\n<li>GST @5% = INR 300<br \/>\nTotal = INR 6,300<\/li>\n<\/ul>\n<p>Room Tariff \u20b98,000<\/p>\n<ul>\n<li>GST @18% = INR 1,440<br \/>\nTotal = INR 9,440<\/li>\n<\/ul>\n<p>Meal \u20b91,000 (Specified Premises)<\/p>\n<ul>\n<li>GST @18% = INR 180<br \/>\nTotal = INR 1,180<\/li>\n<\/ul>\n<p>GST Compliance Challenges for Hotels due to ITC reversal under Rule 42, Segregation of turnover, Proper classification of premises, Taxpayer has to maintaining audit-ready documentation and Accurate invoicing (room vs bundled package). Hotels offering combo packages (Room + Meal) must determine whether it qualifies as a composite supply or separate supply.<\/p>\n<ul>\n<li>Administrative Ease: Multiple taxes abolished \u2192 simpler compliance.<\/li>\n<li>Clarity for Consumers: One unified tax \u2192 transparent billing.<\/li>\n<li>Faster Check-outs: Reduced billing complexity.<\/li>\n<li>Full Input Tax Credit: Easier claim of ITC on raw materials, supplies, and services.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cons_of_GST_for_Hospitality\"><\/span><span style=\"color: #000080;\"><strong>Cons of GST for Hospitality<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Increased Technological Burden: Businesses need digital systems for compliance and reconciliations.<\/li>\n<li>Higher Costs in Some States: Minimal benefit where pre-GST taxes were already close to 18\u201319%.<\/li>\n<li>Global Competitiveness: India\u2019s GST rates (18%) remain higher than Asian peers like Singapore (7%) or Japan (8%), impacting backpacker\/tourist inflow.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Action_Required_from_Hotels_restaurant_spa_banquet_or_these_Services_prover_Organization\"><\/span><span style=\"color: #000080;\"><strong>Action Required from Hotels, restaurant, spa, banquet or these Services prover Organization<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>All the Hotel, restaurant, spa, banquet or these Services prover Organization must verify and update GST configurations manually. Organization invoices may not immediately reflect revised GST rates. Company account dept must edits to bookings after 22nd September will trigger revised GST rates. Update your Accounts\/Finance team about transitional billing provisions.<\/li>\n<li>We needed Cross-check communication for reconciliations whether origination systems adopt new GST Rate slabs.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion_%E2%80%93_In_Summary\"><\/span><span style=\"color: #000080;\"><strong>Conclusion &#8211;\u00a0<\/strong><strong>In Summary <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>GST on hotel rooms is charged at 5% for tariffs up to INR 7,500 per night (without ITC) and 18% for rooms above INR 7,500, where ITC is allowed. The rate for rooms up to INR 7,500 was reduced from 12% to 5% effective 22 September 2025. Hotel packages (room + meals) are taxed based on their structure, and if properly bundled, composite supply rules apply. GST on restaurant services within hotels is 5% without ITC in non-specified premises and 18% with ITC in specified premises. Business travelers can claim ITC only when GST is charged at 18% and subject to fulfillment of conditions under Section 16 of the CGST Act.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>GST rate on Hospitality Industry\/ Hotel Rooms in India The hospitality &amp; tourism industry in India is expected to rise from INR 15.24 lakh crore (US$ 234.03 billion) in 2017 to INR 32.05 lakh crore (US$ 492.21 billion) by 2028. Implementation of GST has helped the sector by reducing costs for customers, harmonising taxes, and &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10020],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29913"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29913"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29913\/revisions"}],"predecessor-version":[{"id":31314,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29913\/revisions\/31314"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}