GST on Hotel Accommodation —
5% or 18%?
The correct GST rate on hotel rooms per unit per day under the GST 2.0 two-slab structure, plus restaurant-in-hotel rates, Input Tax Credit and registration rules.
Hotel room accommodation is taxed on the value of supply per unit per day. Rooms at ₹7,500 or below per day attract 5% GST without ITC; rooms above ₹7,500 per day attract 18% GST with ITC. Under the GST 2.0 reform (effective 22 September 2025) the earlier 12% slab was removed and the rate now follows the actual value charged, not the old "declared tariff".
GST on Hotel Rooms — Decision Table
The GST rate for common hotel and hospitality scenarios in India, with ITC eligibility. The slab is decided per room, per day, on the value charged.
| Type of Supply | GST Rate | ITC | Notes |
|---|---|---|---|
| Room tariff up to ₹7,500 / day | 5% | No | Budget & mid-range hotels |
| Room tariff above ₹7,500 / day | 18% | Yes | Luxury / 5-star hotels |
| Restaurant in hotel with all rooms < ₹7,500 | 5% | No | Non-specified premises |
| Restaurant in hotel with any room ≥ ₹7,500 | 18% | Yes | Specified premises test |
| Banquet / convention hall rental | 18% | Yes | Renting of premises for events |
| Spa, laundry, separate car parking | 18% | Yes | Separately-billed services |
| Wedding / event package (room + food + hall) | 18% | Yes | Composite supply — subject to facts |
Rates reflect the GST 2.0 two-slab structure effective 22 September 2025. Sub-cases (composite packages, mixed use) can vary — confirm on the official GST portal before invoicing.
Which GST Rate Applies to Your Hotel?
One number decides it: the value charged per room, per day. At ₹7,500 or below the room is taxed at 5% without ITC; above ₹7,500 it is taxed at 18% with full ITC. The rate is tested unit-by-unit and day-by-day, so a hotel can have both slabs across different room types.
Tariff ≤ ₹7,500/day — no ITC
- Budget and mid-range hotels
- Rooms charged at ₹7,500 or below per day
- Input Tax Credit not available
- Restaurant in the hotel also 5% (if no room ≥ ₹7,500)
- Lower headline price for the guest
Tariff > ₹7,500/day — with ITC
- Luxury / 5-star hotels
- Rooms charged above ₹7,500 per day
- Full input-tax credit available
- Restaurant in the hotel becomes 18% (specified premises)
- Credits can offset the higher rate
Before 22 September 2025 the ₹1,001–₹7,500 band was taxed at 12%. Under the GST 2.0 reform that middle slab was removed: rooms up to ₹7,500/day are now 5% (without ITC) and only rooms above ₹7,500/day carry 18% (with ITC). The old "declared tariff" concept was replaced by the actual value charged.
Not sure which slab your rooms fall into?
Get My GST Rate →GST on a Restaurant Inside a Hotel
The rate for a hotel's in-house restaurant follows the specified premises test. If the hotel has any room with a value of supply of ₹7,500 or more per day, the restaurant charges 18% with ITC. If every room is below ₹7,500/day, the restaurant charges 5% without ITC, like a standalone outlet.
- Hotel with any room ≥ ₹7,500/day → in-house restaurant is 18% with ITC (specified premises).
- Hotel where all rooms are < ₹7,500/day → in-house restaurant is 5% without ITC.
- Room service and in-room dining follow the same rate as the hotel's restaurant.
- For the full restaurant rate logic — dine-in, takeaway, Zomato/Swiggy and composition — see our GST on restaurant food guide.
Running a hotel restaurant? Get your specified-premises classification confirmed.
Talk to a GST Expert →ITC, Registration & SAC for Hotels
Whether a hotel can recover its input GST depends on the room slab. At 18% the hotel claims full ITC on inputs; at 5% ITC is not available and the GST on rent, furniture and supplies becomes an embedded cost.
| Scenario | ITC? | Reason |
|---|---|---|
| Hotel rooms taxed at 18% (> ₹7,500/day) | Yes | Standard B2B credit on hotel inputs |
| Hotel rooms taxed at 5% (≤ ₹7,500/day) | No | 5% rate comes without ITC |
| Restaurant in specified premises (18%) | Yes | Full ITC on kitchen inputs |
| Restaurant at 5% (non-specified premises) | No | 5% restaurant rate blocks ITC |
| Corporate guest — invoice in company GSTIN | Yes* | Business use; usual conditions & blocked-credit rules apply |
* Guest-side ITC depends on business use, a valid invoice with GSTIN and Section 17(5) not blocking it. Confirm your specific facts.
- Registration threshold: ₹20 lakh of aggregate turnover for services (₹10 lakh in special-category states).
- SAC 996311 — room or unit accommodation services provided by hotels, inns and similar establishments.
- Place of supply for accommodation is the state where the hotel is located (CGST + SGST).
The rate is not just a percentage — ITC changes the real cost. A hotel above ₹7,500/day at 18% can recover input GST, while a 5% budget hotel absorbs it. Where sub-cases are uncertain (composite packages, mixed room types, OTA bookings), take a documented position and confirm against gst.gov.in and CBIC before invoicing.
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