GST rates on hotel rooms, post 22 September 2025

GST on hotel accommodation changed materially on 22 September 2025 following the 56th GST Council meeting. The two slabs that applied earlier (12% up to ₹7,500 and 18% above) were replaced. The current rates per CBIC Notification 11/2017 - Central Tax (Rate) as amended:

• Declared tariff up to ₹7,500/night: 5% GST. No input tax credit available for the hotel or for the corporate guest.
• Declared tariff above ₹7,500/night: 18% GST. Full ITC available to the hotel and to a GST-registered corporate guest if the booking is in the company name.

The applicable rate is based on the declared tariff, not the discounted booking price. A ₹10,000 room booked at a ₹6,500 discount still attracts 18% GST because the declared tariff exceeds ₹7,500. This often surprises guests and triggers audit flags when a company claims ITC on what looks like a sub-₹7,500 booking.

Specified premises vs non-specified premises

The 22 September 2025 amendments introduced the concept of "specified premises", a hotel or accommodation property where any room's declared tariff exceeded ₹7,500/night in the previous financial year. The classification has knock-on effects:

• Specified premises: all in-house restaurant and catering services attract 18% GST with ITC.
• Non-specified premises: in-house restaurants charge 5% GST with no ITC (matching the standalone-restaurant rate).

A hotel can voluntarily opt-in as specified premises through a formal CBIC filing if it expects to add a higher-tariff room. Once classified, the status persists for the FY.

Food & beverage on the folio

F&B lines on a hotel folio are taxed separately from room charges. The rate depends on whether the hotel is specified or non-specified (see above). Liquor is outside the GST regime entirely, it's taxed under state excise, so liquor lines on the folio do not carry CGST/SGST/IGST. Mineral water, soft drinks and packaged food carry their normal GST rates regardless of the hotel's classification.

What makes a hotel bill ITC-eligible

For a GST-registered business to claim input tax credit on a hotel bill, the invoice must comply with Rule 46 of the CGST Rules and include:

• Hotel's name, address, GSTIN and state
• Guest's company name and GSTIN (mandatory for ITC; personal-name bookings break the chain)
• Check-in and check-out dates
• Room type and declared nightly tariff
• Split of room charges, F&B and any other services with separate GST lines
• GST amount shown separately (not hidden in the total)
• Invoice serial number unique within the hotel's financial year
• Place of supply, relevant when the hotel and guest's company are in different states (then IGST applies)

ITC is only available on rooms taxed at 18% (i.e. declared tariff above ₹7,500). Rooms in the 5% slab don't carry ITC for either side.

Corporate vs personal bookings

A personal hotel booking where the company does not pay is not eligible for ITC, even if you're travelling for business. The bill must be raised in the company's name with the company's GSTIN for the ITC chain to flow. If you booked under your personal name and were reimbursed, the invoice is worth only its reimbursement value; no ITC.

Hotel folio vs final invoice

A hotel folio is an itemised running bill across your stay (room, meals, laundry, phone calls, mini-bar). The final folio becomes the tax invoice on checkout. Our generator produces the consolidated checkout invoice in a folio format, the long-form itemised receipt that matches what Indian chain hotels (Taj, Oberoi, Marriott, Radisson, ITC) produce. Each line carries its own GST treatment to satisfy ITC audit.

Common mistakes

• Using the old 12% slab. 12% retired on 22 Sep 2025. Sub-₹7,500 rooms are now 5% (no ITC); above-₹7,500 rooms are 18% (with ITC).
• Missing check-in/check-out dates. Required for ITC claim under Rule 46.
• Adding F&B into the room line. Different GST treatments; the lines must be split for the buyer to claim ITC correctly.
• Personal booking for ITC. Doesn't work, the GSTIN on the invoice must be the company's, not the employee's.
• Liquor with GST applied. Liquor is outside GST. State excise applies separately and shouldn't appear in the GST computation.