GST Rate Guide · FY 2025-26

GST on Hotel Rooms in India —
5% or 18%?

The correct GST rate on hotel accommodation after GST 2.0, the ₹7,500 tariff test, restaurant, banquet and spa rates, plus how business travellers claim ITC on hotel bills.

Updated for FY 2026-27 GST Expert Reviewed Hotel & Hospitality

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5%Rooms ≤ ₹7,500

18%Rooms > ₹7,500

NilRooms < ₹1,000

₹20LRegistration threshold

Quick Answer

GST on hotel rooms depends on the per-night room value. Rooms up to ₹7,500/night are taxed at 5% without ITC (cut from 12% under GST 2.0, effective 22 September 2025); rooms above ₹7,500/night are taxed at 18% with ITC. Rooms priced below ₹1,000/night are Nil (exempt). GST is charged on the value actually invoiced, not the declared tariff.

Below ₹1,000 Nil

₹1,000–₹7,500 5%

Above ₹7,500 18%

Restaurant in hotel 5% / 18%

At a glance

GST on Hotel Services — Decision Table

The GST rate for every common hotel and hospitality service in India, with ITC eligibility, on the current GST 2.0 rate schedule.

Service	GST Rate	ITC	Notes
Room value below ₹1,000/night	Nil	No	Exempt supply
Room value ₹1,000–₹7,500/night	5%	No	Cut from 12% on 22 Sep 2025
Room value above ₹7,500/night	18%	Yes	Premium / luxury hotels
Restaurant in hotel (rooms ≤ ₹7,500)	5%	No	Not "specified premises"
Restaurant in specified premises (≥ ₹7,500)	18%	Yes	5-star / luxury hotels
Banquet / marriage hall / venue rental	18%	Yes	Renting of premises
Spa / health club / salon at hotel	5%	No	Cut from 12% on 22 Sep 2025
Laundry, Wi-Fi, parking, other services	18%	Yes	Standalone hotel services
Alcohol served	Outside GST	—	State VAT / excise applies

Rates reflect the GST 2.0 two-slab structure effective 22 September 2025. Confirm on the official GST portal before invoicing.

The core question

Which Hotel-Room GST Rate Applies?

For accommodation, one number decides it: the value of the room actually invoiced per night. The GST 2.0 reform removed the old 12% slab, so most rooms now fall to 5% and only premium rooms above ₹7,500 remain at 18%.

Rooms up to ₹7,500/night — no ITC

Budget, mid-range & most business hotels
Room value ₹1,000 to ₹7,500 per night
Input Tax Credit not available to the hotel
Below ₹1,000/night is fully exempt (Nil)
Cut from 12% under GST 2.0

18%

Rooms above ₹7,500/night — with ITC

Premium, luxury & 5-star hotels
Room value above ₹7,500 per night
Full input-tax credit available to the hotel
Restaurant in these premises is also 18%
Rate unchanged by GST 2.0

It is transaction value, not tariff

The slab is decided by the amount you are actually billed, not the rack rate. A room with a ₹8,000 declared tariff sold at a discounted ₹7,000 is taxed at 5%; a ₹7,500 room billed at exactly ₹7,500 stays at 5% (the 18% slab applies only above ₹7,500).

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Worked example

How Hotel GST Adds Up

Two identical two-night stays, taxed differently purely because of the per-night room value.

5% Room at ₹6,000/night

Room value (2 nights)₹12,000

GST @ 5%₹600

Guest pays₹12,600

18% Room at ₹10,000/night

Room value (2 nights)₹20,000

GST @ 18%₹3,600

Guest pays₹23,600

Note the trade-off: the 5% hotel cannot claim ITC on its own inputs (rent, furnishings, utilities), while the 18% hotel can — so the effective tax cost is not simply the headline percentage.

Guest booksRoom value fixes the slab

→

Hotel invoices5% / 18% on transaction value

→

GST returnHotel reports supply in GSTR-1/3B

→

Business guestClaims ITC only if room > ₹7,500

Booking hotels for business travel? Get your ITC eligibility reviewed.

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Beyond the room

Restaurant, Banquet & Other Hotel Services

A hotel bill often mixes several supplies at different rates. Food is the classic example — a restaurant inside a hotel is 5% unless the hotel is specified premises (any room ≥ ₹7,500/night), in which case it is 18% with ITC.

Service	GST Rate	ITC	Notes
Room service / in-house restaurant	5%	No	Non-specified premises
Restaurant in specified premises	18%	Yes	Rooms ≥ ₹7,500/night
Banquet / conference hall rental	18%	Yes	Renting of premises
Food served at banquet	5%	No	Outdoor-catering rate
Spa / health club / salon	5%	No	Cut from 12% on 22 Sep 2025
Laundry / Wi-Fi / parking	18%	Yes	Standalone services

Wedding & event packages are usually a composite supply taxed at 18% where the venue is the principal supply.

Composite vs bundled billing

Where a hotel sells a package (room + breakfast + spa), tax follows the principal supply and the whole package can take the room-slab rate. Where items are billed separately, each line takes its own rate — so how the invoice is drawn up matters. Get a hotelier's classification checked before you standardise your billing.

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For business travellers

Claiming ITC on Hotel Bills

A GST-registered business can claim Input Tax Credit on hotel accommodation used for business travel — but only where GST is actually charged. Since 5% rooms are billed without ITC and Nil rooms carry no tax, credit is effectively available only on 18% (above ₹7,500) rooms.

ITC available when

The stay is for genuine business travel
The room is billed at 18% (value > ₹7,500/night)
The invoice shows your company name & GSTIN
The supply appears in your GSTR-2B

ITC blocked / unavailable when

The room is billed at 5% (no ITC passed on)
The stay is personal, leisure or a staff outing
You have only a cash bill without your GSTIN
The room is exempt (below ₹1,000/night)

For hoteliers

Hotel GST Compliance Checklist

Registration is mandatory once aggregate turnover crosses ₹20 lakh (₹10 lakh for special-category states). E-commerce operators such as OTAs must register regardless of turnover.

GST registration (GSTIN)
Correct room-slab classification
Transaction-value based rate on each invoice
Restaurant & banquet rate mapping
OTA / aggregator reconciliation
GSTR-1 (outward supplies)
GSTR-3B (monthly / quarterly)
ITC reconciliation (18% rooms)
E-invoicing applicability
GSTR-9 annual return
Books & records upkeep
Separate handling of alcohol (outside GST)

TaxClue Insight

The GST 2.0 cut to 5% helps guests but removes ITC for most hotels — input GST on renovation, furnishings and utilities now becomes an embedded cost for rooms up to ₹7,500. Hotels with a mix of sub-₹7,500 and premium rooms must apportion ITC monthly under Section 17 and Rules 42–43.

Government sourcesRates & notifications: gst.gov.in · CBIC rate finder: cbic-gst.gov.in · GST 2.0 hotel & restaurant changes effective 22 September 2025 (56th GST Council) · Accommodation SAC 9963; specified-premises & ITC apportionment under Section 17, Rules 42–43

Frequently Asked Questions

Room Rates

What is the GST rate on hotel rooms in India?

It depends on the per-night room value actually charged. Rooms up to ₹7,500/night are taxed at 5% without ITC (reduced from 12% under GST 2.0 effective 22 September 2025); rooms above ₹7,500/night are taxed at 18% with ITC; and rooms below ₹1,000/night are exempt (Nil). The slab follows the transaction value, not the declared tariff.

Did GST on hotel rooms change in 2025?

Yes. Under the GST 2.0 reform effective 22 September 2025, the earlier 12% slab on hotel rooms between ₹1,000 and ₹7,500 per night was cut to 5% (without ITC). Rooms above ₹7,500 continue at 18% with ITC, and rooms below ₹1,000 remain exempt. This made most mid-range and business hotel stays cheaper for guests.

Is GST 5% or 18% on a hotel room?

A hotel room is 5% if its billed value is up to ₹7,500 per night and 18% if it is above ₹7,500 per night. So most budget, mid-range and business hotels charge 5% (no ITC), while premium, luxury and 5-star hotels charge 18% (with ITC).

Is there GST on hotel rooms below ₹1,000 per night?

No. Hotel accommodation with a room value below ₹1,000 per night is exempt from GST (Nil rate). As it is an exempt supply, the hotel also cannot claim input tax credit on the inputs used for such rooms.

Is GST charged on the tariff or the amount actually paid?

On the amount actually invoiced (transaction value), not the declared or rack tariff. If a hotel with an ₹8,000 tariff gives a discount and bills ₹7,000, the applicable rate is 5% because the value charged is ₹7,500 or below. The 18% slab applies only when the billed value exceeds ₹7,500 per night.

ITC & Business Travel

Can a business claim ITC on hotel room GST?

Yes, where GST is actually charged and the stay is for genuine business travel. In practice, credit is available mainly on 18% rooms (value above ₹7,500/night), because 5% rooms are billed without ITC and rooms below ₹1,000 are exempt. You must hold a tax invoice showing your company name and GSTIN, and the supply must appear in your GSTR-2B.

Can I claim ITC on a 5% hotel room?

No. Rooms taxed at 5% are supplied without input tax credit — the 5% rate is offered on the condition that ITC is not passed on. A business guest paying 5% cannot claim it back. Only 18% (above ₹7,500) hotel rooms carry claimable ITC.

Is ITC blocked on hotel stays for employees?

ITC is available for hotel stays that are genuine business travel with a proper GST invoice bearing your GSTIN. It is not available where the stay is personal, recreational or a staff leisure outing, where you hold only a cash receipt without GSTIN, or where the room was billed at 5% or exempt (below ₹1,000) and therefore carries no claimable tax.

Restaurant & Food

What is the GST rate on a restaurant inside a hotel?

A restaurant inside a hotel is taxed at 5% without ITC, the same as a standalone restaurant — unless the hotel is "specified premises" (any room has a declared tariff of ₹7,500 or more per night), in which case its restaurant is taxed at 18% with ITC. So most hotel restaurants are 5%, and only luxury / 5-star hotel restaurants are 18%.

What decides if a hotel restaurant charges 18%?

The "specified premises" test. If any room in the hotel has a declared tariff of ₹7,500 or more per night, the hotel is specified premises and its in-house restaurant charges 18% with ITC. If no room reaches ₹7,500, the restaurant charges 5% without ITC, regardless of the food price.

Banquet & Other Services

What is the GST rate on hotel banquet and conference halls?

Renting a banquet hall, conference room or event venue is taxed at 18% GST with ITC, as it is renting of premises. Food served at the banquet is taxed at 5% (outdoor-catering rate). A combined wedding or event package is usually a composite supply taxed at 18% where the venue is the principal supply.

What is the GST rate on hotel spa, laundry and other services?

Spa, health club and salon services are now taxed at 5% without ITC (reduced from 12% under GST 2.0 from 22 September 2025). Standalone services like laundry, Wi-Fi, parking and other conveniences generally attract 18% with ITC. Alcohol served is outside GST and taxed under state VAT/excise.

Homestays & OTAs

What is the GST rate on homestays, OYO and Airbnb rooms?

A homestay or aggregator room follows the same value-based slabs as hotels: Nil below ₹1,000/night, 5% up to ₹7,500/night, and 18% above ₹7,500/night, based on the amount actually charged. A small host with annual turnover below ₹20 lakh need not register, but the online platform (OTA) is an e-commerce operator liable for GST on such bookings.

Do online travel platforms like MakeMyTrip charge GST?

Yes. Online travel aggregators are e-commerce operators and must register for GST regardless of turnover. Accommodation booked through them carries GST at the applicable room-value slab (Nil / 5% / 18%), and the platform's own convenience or service fee is a separate supply taxed at 18%.

Registration

When must a hotel register for GST?

A hotel supplying accommodation as a service must register once aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh for special-category states). Hotels supplying through an e-commerce operator, or making inter-state supplies, may need to register regardless of turnover. Small homestays below the threshold can operate without registration.

Can a hotel opt for the GST composition scheme?

A hotel providing accommodation is generally not eligible for the composition scheme, which is open to goods suppliers and — as a special case — to restaurants. A hotel that only runs a restaurant may use the restaurant composition option (flat 5%, up to ₹1.5 crore turnover), but accommodation itself is charged under the normal 5%/18% slabs.

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Related TaxClue Services

GST RegistrationGet your hotel or homestay registered with the correct classification.Explore →GST Return FilingMonthly GSTR-1 & 3B with OTA and restaurant reconciliation, done for you.Explore →GST on Restaurant FoodThe 5% vs 18% rules for your in-house or hotel restaurant.Explore →ITC ReconciliationClaim eligible hotel-travel ITC and avoid blocked-credit errors.Explore →

Next in this GST cluster

GST on Restaurant Food GST on Food Delivery Input Tax Credit Rules GST Calculator HSN / SAC Codes & Rates GST Rate List

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