GST on Hotel Accommodation — 0%, 12% and 18% Slab Guide (2026)

Updated: 3 June 2026 | CGST Notification 11/2017 | SAC 9963

Hotel room GST depends on the transaction value per room per day: rooms priced at ₹1,000 or below are exempt (0%); rooms from ₹1,001 to ₹7,500 attract 12% GST; rooms above ₹7,500 attract 18% GST. Restaurant in a hotel with room tariff above ₹7,500 charges 18% GST (with ITC). Standalone restaurants charge 5% (no ITC). Post-Budget 2022, the rate is based on actual transaction value, not declared tariff.

0 / 12 / 18%

Hotel room GST slabs based on room tariff per day
≤₹1,000: Exempt | ₹1,001–₹7,500: 12% | >₹7,500: 18%

Budget 2022 Change: Before 2022, the GST slab was determined by the hotel's "declared tariff" (published rack rate), not the actual booking price. Post-2022, the slab is based on transaction value — the actual price charged. A room discounted from ₹10,000 to ₹6,000 now attracts 12% GST (not 18%), saving the guest ₹360 per night.

GST on Hotel Rooms — Slab Table (2026)

Room Tariff (per unit per day)	GST Rate	Example: Room at ₹5,000/night
Up to ₹1,000	0% (Exempt)	Budget hotels, dharamshalas, dormitories
₹1,001 to ₹7,500	12%	₹5,000 room → GST = ₹600 → Total = ₹5,600
Above ₹7,500	18%	₹10,000 room → GST = ₹1,800 → Total = ₹11,800

Rate applies per room per day based on actual transaction value. Composite supply (room + breakfast as a package) — the rate depends on the principal supply (accommodation).

GST on Restaurant Inside a Hotel

Restaurant Type	GST Rate	ITC Available?
Standalone restaurant (AC or non-AC)	5%	No ITC on food inputs
Restaurant in a hotel with room tariff ≤₹7,500/day	5%	No ITC on food inputs
Restaurant in a hotel with room tariff >₹7,500/day	18%	Full ITC available
Outdoor catering services	18%	No ITC (blocked u/s 17(5)(b))
Room service (food in room) — high-tariff hotel	18%	Full ITC available

GST on Other Hotel Services

Service	GST Rate	Notes
Banquet hall / convention centre rental	18%	Taxable as rental of premises for events
Spa and wellness services	18%	Personal care services — 18% GST
Laundry services in hotel	18%	Part of hotel services — SAC 9963
Car parking in hotel premises	18%	If charged separately — 18% GST
Wedding package (accommodation + food + hall)	18%	Composite supply — principal supply rate applies
Online travel agency (OTA) booking commissions	18%	Intermediary services — 18% GST on commission
Heritage hotel (cultural tourism)	Same slabs	No separate concessional category — standard slabs apply

ITC Rules for Hotels — Post Budget 2022

Hotels registered under GST can claim ITC on their inputs. The key rules are:

Regular hotel (12% or 18% on rooms): Full ITC available on hotel construction (if under construction), furniture, equipment, housekeeping supplies, service inputs
Restaurant (5% GST): ITC on food inputs, beverages, kitchen equipment is blocked under Section 17(5)(b). However, ITC on other hotel-side inputs (AC, electricity equipment) can be claimed if separately attributable
Restaurant (18% GST, in high-tariff hotel): Full ITC available on all inputs including food and kitchen equipment
Employee accommodation: If a hotel provides free accommodation to employees as a perk, ITC on such accommodation is blocked under Section 17(5)(b)
Business travel: Corporate guests can claim ITC on GST paid for accommodation if the invoice shows the company's GSTIN, the stay is for business purposes, and the hotel is in the same state as the company's GST registration (for CGST/SGST credit)

HSN/SAC Code and Registration for Hotels

SAC code: 9963 — "Accommodation, food and beverage services"
Sub-category for accommodation: 99631 — short-term accommodation
Registration threshold: ₹20 lakh (services) — hotels earning below this need not register
Composition scheme (for restaurants): Restaurants with turnover below ₹1.5 crore can opt for composition at 5% — no ITC, no inter-state supply
Place of supply: Hotel GST is CGST + SGST in the state where the hotel is located — no IGST on accommodation (it is always intra-state from a hotel's perspective)

GST on Airbnb, Homestays and Online Rentals

Short-term rentals via platforms like Airbnb, MakeMyTrip, or OYO fall under the same hotel GST rules:

If the per-night rate is ₹1,000 or below — exempt
If between ₹1,001 and ₹7,500 — 12% GST
If above ₹7,500 — 18% GST
The platform (OTA) collects GST as the Electronic Commerce Operator (ECO) in many cases under Section 9(5) of CGST Act — the hotel owner's liability is discharged through the OTA
Individual property owners renting through platforms need to register if their turnover exceeds ₹20 lakh

Frequently Asked Questions

What is the GST on a hotel room costing ₹3,000 per night?

A hotel room with a declared tariff of ₹3,000 per night falls in the ₹1,001–₹7,500 slab and attracts 12% GST. The GST is calculated on the transaction value (actual amount charged), not on the published tariff or rack rate. So if you book the room at ₹3,000, GST = ₹360 (12% of ₹3,000). Your total bill = ₹3,360.

Is GST applicable on hotels below ₹1,000 per night?

No. Hotel rooms with a declared tariff (transaction value per unit per day) of ₹1,000 or below are fully exempt from GST. This exemption was introduced to benefit budget travellers and small hotels. The ₹1,000 threshold applies to the actual price charged, not the MRP or published rack rate. If the room is listed at ₹1,500 but discounted to ₹990, the GST would be 0% on the ₹990 transaction.

Can businesses claim ITC on hotel accommodation?

Yes, with conditions. Businesses can claim ITC on GST paid for hotel accommodation if: (1) the accommodation is used for business purposes, (2) the hotel is located in the same state as the business, and (3) the tax invoice is issued in the name of the business with GSTIN. However, ITC on accommodation that is part of a blocked credit under Section 17(5) — such as accommodation for personal use or when provided as a free perk to employees — is not eligible.

What is the GST on restaurant food inside a hotel?

Restaurants located inside hotels where the room tariff exceeds ₹7,500/day charge 18% GST on food and beverages. Standalone restaurants (not in a hotel, or in hotels where room tariff is below ₹7,500) charge 5% GST — but without the ability to claim ITC on food inputs. The 18% rate for hotel restaurants allows them to claim full ITC on kitchen equipment, food purchases, and services.

What changed in hotel GST after Budget 2022?

Budget 2022 abolished the "declared tariff" concept and replaced it with "transaction value" as the basis for determining the GST slab. Earlier, if a hotel had a declared tariff of ₹8,000 but offered a discount to ₹6,000, it was still taxed in the ₹7,500+ slab based on declared tariff. Post the change, the actual price charged (transaction value) determines the applicable GST rate. This was a taxpayer-friendly change that reduced GST on discounted hotel bookings.

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