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

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.

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).

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.

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.

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.

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.

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.

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%.

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.

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.

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.

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.

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%.

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.

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.