GST on Hotels – Slab Rates Based on Room Tariff

A Delhi couple named Sargar and Ratna travelled to Mussoorie for a peaceful weekend escape. They anticipated paying ₹12,000 for two nights, so they reserved a deluxe room at ₹6,000 each night. However, they became confused when the amount totalled ₹16,520. A deeper inspection showed that 18% of the food and 18% of the room tariff had GST applied. 

They were curious to learn that, according to the present GST regulations, hotel rooms with a cost of ₹7,500 or more are subject to 18% GST, while those with a tariff of ₹7,500 or less are usually subject to 12% or less, depending on the category. Their surprise quickly turned into curiosity about how GST truly works in the hospitality sector.

GST on Hotels – Create a Table Mentioning Different Categories of Hotels with Price and Applicable GST Rate

As of April 1, 2025, the Goods and Services Tax (GST) rates for hotel accommodations in India are determined based on the actual value of the room tariff, replacing the previous "declared tariff" system. The applicable GST rate is contingent upon the room's tariff in the preceding financial year.

GST Rates for Hotel Accommodations:
 

Note: GST rates are based on the actual room tariff charged, not the declared tariff.

Read More - GST on Tours and Travels

For restaurant services within hotels, the GST rate depends on the room tariff:

Hotels may opt to apply an 18% GST rate on restaurant services regardless of room tariffs by submitting a declaration.

These changes aim to simplify the GST structure and provide clarity on tax applicability based on actual room tariffs.

HSN Codes for Hotels – Create a Table Mentioning Hotel Types with Their Respective HSN Codes

Under the Goods and Services Tax (GST) regime in India, hotels and similar establishments are classified based on the type of accommodation and services they provide. Each category is assigned a specific Services Accounting Code (SAC) under Chapter 99, which pertains to accommodation, food, and beverage services.

Below is a table detailing various types of hotel accommodations along with their corresponding SAC codes and applicable GST rates:
 

Note: The GST rates mentioned are based on the rates applicable as of the latest available information. It's advisable to consult the official GST portal or a tax professional for the most current rates.

Also Read – GST on Banquet hall

Impact of GST on the Hotel Industry with Examples
 

Input Tax Credit (ITC) on Hotels
 

Conclusion

GST on hotels makes the billing process simpler and more transparent for everyone. The tax rate depends on how much the room costs, so the more you spend, the higher the GST. This system not only helps travellers understand what they're paying for but also helps the government collect taxes smoothly and efficiently. It's a win-win for both guests and the country.

FAQs Related to GST on Hotels

Q: What is the GST rate for hotel rooms priced below ₹1,000 per night?

Rooms priced at ₹1,000 or less per night are exempt from GST (0%).

Q: Is GST charged on the discounted price or the declared tariff?

GST is charged on the actual transaction (discounted) price, not the declared tariff.

Q: Can hotels claim Input Tax Credit (ITC) on goods used for room maintenance?

Yes, ITC is allowed on goods used for business purposes like room maintenance.

Q: What is the GST rate for hotel rooms with a tariff above ₹7,500?

Rooms with a tariff above ₹7,500 attract 18% GST.
 

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?