GST on Hotels



When you get into a hotel room,

you know there is secrecy,

there is luxury,

there is comfort and there is GST also.

A quote little modified just like GST rates for hotel rooms are.

Here are some frequently asked questions on GST on hotel rooms. Before booking room in hotel don’t forget to read these FAQs.

Q)What are the final GST rateson hotels?

Types of hotels Rate
Restaurants 5% with NO ITC
Hotels with room tariff < 1000 Exempt
Hotels with room tariff 1000 – 2500 12% ITC Allowed
Hotels with room tariff 2500 – 7500 18% ITC Allowed
Hotels with room tariff >7500 28% ITC Allowed


Q) What is declared tariff?

A) Declared tariff includes charges for all amenities provided in the unit of accommodation but without excluding any discount offered on the published charges for such unit.

Q) What about ITC availability for person staying in hotel room booked for business purpose?

A) ITC is allowed BUT it is not allowed if hotel is located outside your state. Let me explain in with an example –

If you are registered in Nagpur and your business executives travels to Bangalore for a meeting and stays there in a hotel. GST paid on hotel room will not be allowed to claim ITC against your output tax liability. In case of hotels place of supply will be the place where hotel is located. Bangalore hotel will charge CGST and Karnataka SGST. Credit of such cannot be availed against Maharashtra SGST/CGST.

Q) Whether GST is charged on actual room tariff or declared tariff?

A) Actual amount charged (Transaction value)

Q) What will be GST rate if cost goes up owing to additional bed?

A) GST rate will be determined according to declared tariff for the room. Rate so determined would be levied on actual amount charged.

Q) Same room may have different tariff at different times depending on seasons or flow of tourists. Which rate to be used then?

A) In case different tariff is declared for different seasons or periods of the year, tariff declared for the season in which the service of accommodation is provided shall apply.

Q) If tariff changes between booking and actual usage, which rate will be used?

A) Declared tariff at the time of supply would apply.