GST on Hotel Rooms and Hotel Food: Rates by Tariff

The GST on a hotel room is not one rate. It depends on what one room costs for one night: up to ₹7,500, the room is taxed at 5%; above ₹7,500, at 18%. The food you eat in the hotel is a separate supply with its own rate, and the tax on both is always charged in the state where the hotel stands. This guide sets out the current GST rate on hotel rooms after the September 2025 rate changes, how hotel food is taxed, a worked hotel bill, and what a business traveller needs on the invoice to claim the tax back.

GST rate on hotel rooms by tariff

Hotel rooms are classified under SAC 996311, room or unit accommodation for visitors, covered in detail in our guide to the SAC code for hotel accommodation. Since 22 September 2025, when the GST 2.0 rate structure took effect, the rate entry for hotel rooms has two bands:

There is no separate exempt band for cheap rooms any more. A ₹800 room in a registered guest house is taxed at 5% like a ₹7,000 room in a business hotel. The only lodging that charges no GST on rooms is lodging outside the system altogether, such as a small operator below the registration threshold, or residential accommodation that falls under a different exemption entry.

How the rate band is decided

Three rules settle almost every question about which band a room falls in.

• It is the price you pay, not the published tariff. The band is tested on the value of supply, meaning the transaction value actually charged. A room with a ₹9,500 rack rate sold at ₹7,200 through a corporate rate or a sale is a ₹7,200 room, taxed at 5%. The older declared-tariff test was dropped years ago.
• It is per unit, per day. A three-night stay is tested night by night, and two rooms are tested as two units. You never add up the whole bill and test the total. A ₹6,000 room for four nights is a ₹24,000 bill, but every night is a ₹6,000 supply at 5%.
• It excludes GST. The threshold is applied to the value before tax. A ₹7,500 room plus 5% GST costs ₹7,875 and is still in the 5% band; a ₹7,600 room is in the 18% band.

Extras follow the ordinary rules for bundles. Breakfast or an extra bed included in the room rate is naturally bundled with the stay, so it is part of the room's value and takes the room's rate. A spa treatment, airport transfer or laundry billed separately is its own supply at its own rate. Our guide to composite and mixed supplies explains the test. Where nightly prices vary across a stay, as they often do over a weekend, each night can fall in a different band, and the invoice should show the tax night by night or band by band.

What changed in September 2025

Most searches for the new GST rate on hotel room rent are about this change. The bands have moved twice since GST began:

For guests in the lower band the change is a straightforward cut: a ₹5,000 room that carried ₹600 of GST now carries ₹250. For hotels it is a trade. The 5% rate comes with the condition that the hotel does not take input tax credit on the goods and services it uses to supply the room, so the GST it pays on rent, renovation, linen and commissions becomes a cost. That is the same bargain a standalone restaurant makes, and it is why some hotels priced close to ₹7,500 look carefully at which side of the line their rooms sit.

The date that matters for a stay crossing 22 September 2025 is the time of supply, which for a service generally turns on the invoice date and the date of payment. Our guide to time of supply covers how that works when a rate changes.

GST on hotel food and the hotel restaurant

Food served in a hotel is restaurant service, not part of the room, unless it is sold inside the room rate. The GST on hotel food follows the restaurant entry, which has the same two-rate shape:

• 5% without input tax credit for restaurants generally, including restaurants inside hotels that are not specified premises.
• 18% with input tax credit for a restaurant located in specified premises.

Specified premises is a defined term worked out from the hotel's accommodation, not its menu. A hotel qualifies for a financial year if, in the preceding financial year, it supplied rooms above the prescribed value per unit per day, which sits at the same ₹7,500 mark as the room bands. A hotel below the line can opt in by filing a declaration, and one that no longer qualifies can opt out. The status is fixed at the start of the year and does not change with each night's room price. Treat the threshold and the declaration mechanics as points to confirm against the current notification.

In practice, a guest at a premium hotel that sells some rooms above ₹7,500 will usually see 18% on the restaurant and room service bill; a guest at a mid-range business hotel will usually see 5%. Neither is overcharging. Banquets, outdoor catering, alcohol (which is outside GST and carries state VAT) and service charge are covered in our guide to GST on restaurant bills.

A worked hotel bill

Take a guest who stays two nights at a hotel in Jaipur. The room is ₹6,000 a night, breakfast included. She has dinner once at the hotel restaurant for ₹2,000. The hotel sells all its rooms below ₹7,500 and has not opted in, so it is not a specified premises.

Now move the same stay to a ₹9,000 room at a hotel that is a specified premises. Each night carries ₹1,620 of GST (₹810 CGST and ₹810 SGST), and the ₹2,000 dinner carries ₹360 at 18%. The bill rises from ₹700 of tax to ₹3,600 of tax on ₹20,000 of value.

Whatever the rates, a correct GST on hotel bill shows the hotel's GSTIN, a serial invoice number and date, the SAC for each kind of supply, the taxable value and the CGST and SGST separately. It should not show IGST, because the place of supply for a hotel stay is the location of the property; see place of supply rules. If a bill charges GST but you are not sure the hotel is registered, our guide to checking whether the GST on a bill is real walks through it.

Claiming ITC on a hotel bill

Hotel stays for business travel are not blocked credits, so a registered business can claim the GST on them, subject to the ordinary conditions: the stay is for business, the invoice is a tax invoice made out to the business's GSTIN, and the hotel reports it so that it appears in the business's GSTR-2B. The input tax credit rules cover those conditions in full. The hotel's own restriction on the 5% band limits the hotel's credit, not the guest's. A company can claim the 5% it was charged.

Three things decide whether the credit actually arrives:

• The GSTIN must be in the hotel's state. The hotel charges CGST and SGST of its own state, and that credit can be used only by a registration in the same state. A Bengaluru company with no Maharashtra registration cannot claim the GST on a Mumbai hotel bill, however business-related the trip. Give travellers the GSTIN that matches their destination, and quote it at booking, not checkout.
• The invoice must be a B2B invoice. A bill in the employee's name with no company GSTIN gives the company nothing to claim against, and the hotel will not appear in GSTR-2B for it.
• The hotel's GSTIN must be real and active. Credit on an invoice from a cancelled or non-existent registration is not available, and the hotel's failure to file its returns can hold up your credit.

That last check is where GSTIN verification comes in. A travel desk processing hundreds of hotel invoices a month can confirm each hotel's GSTIN is active, that the legal name matches the bill and that the hotel is filing its returns, in one call to the GST API, instead of opening the portal for each one. For an occasional bill, the free GST number search does the same lookup by hand.

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