SAC Code for Hotel and Accommodation Services

A hotel invoice looks simple: one room, a few nights, a tax line. Behind it sit four separate decisions. Which SAC code the room belongs under, which rate band the night falls into, which state's tax is charged, and whether the guest's employer can ever recover it. Get the code wrong and your GSTR-1 summary is off. Get the place of supply wrong and the hotel charges the wrong type of tax. Misunderstand the last one and your finance team keeps chasing credit that was never available to it. This post takes each in turn.

Heading 9963: where accommodation sits in the SAC scheme

Services Accounting Codes follow the same logic as HSN codes for goods: a two-digit chapter, a four-digit heading, then five- and six-digit groups that narrow the description. All services sit in chapter 99. Heading 9963 is accommodation, food and beverage services, and it splits into two families that behave very differently for tax purposes.

The 99631 and 99632 groups cover places to sleep: hotel rooms, camp sites, holiday camps, student residences and other lodging. The 99633 group covers food and drink: restaurants, cafes, room service, catering and similar supplies. A hotel that runs a restaurant is supplying both, and each supply is classified on its own unless it is sold as a single bundle.

If you need the wider map of service headings, the SAC code list for services sets out every heading in chapter 99. Long-term letting of property, whether residential or commercial, is not in 9963 at all. It sits under real estate services, covered in GST on rent.

The accommodation codes, one by one

The six-digit codes below are the ones you will actually print on an invoice. Use the most specific code that describes what you supply. A business that turns over more than the notified limit has to report six-digit codes in its GSTR-1 HSN summary, so a four-digit 9963 alone is not enough there.

A serviced apartment sold by the night to travellers is 996311, not rental of residential property. What decides it is the nature of the stay: short, transient, with the operator in control of the unit. A flat let on a monthly agreement to someone who lives there is a letting of property, whatever the landlord calls it.

For the food side of a hotel, do not reuse the room code. Restaurant service, room service and banquet catering are classified in the 99633 group and carry their own rate conditions. Those are covered in detail in how GST works on restaurant bills, and not repeated here.

How the GST rate on a room is decided

Hotel accommodation has never carried a single rate. The rate entry is banded: the value of supply of a unit of accommodation per day decides which band applies, and each band has its own percentage and, in some cases, its own condition on input tax credit.

Two points about that test settle most disputes.

• It is the transaction value, not the declared tariff. The original entries in 2017 used the hotel's declared or published tariff. That was replaced in 2018 with the value actually charged. A room listed at a high rack rate but sold at a lower negotiated or discounted price is banded on the lower price.
• It is tested per unit, per day. A three-night stay is three supplies of one unit per day, and a booking of two rooms is two units. You do not add up the whole invoice and test the total.

Services, including accommodation, were part of the rate rationalisation that took effect on 22 September 2025. Our guide to the GST rate slabs sets out the new 5% and 18% structure. It does not list the accommodation bands, and neither do we: check the exact thresholds and percentages for room tariffs against the current CBIC rate notification on cbic-gst.gov.in before you set up a property management system or dispute a bill.

Extras charged with the room follow the usual composite supply logic. An extra bed or a breakfast sold as part of the room rate is naturally bundled with the accommodation and takes its classification. A spa treatment or a minibar charge billed separately is its own supply at its own rate.

Specified premises: where rooms meet the restaurant

The room tariff matters for more than the room. It also decides the rate on the hotel's restaurant, through the concept of specified premises.

A restaurant in specified premises is taxed at the higher slab with input tax credit. Other restaurants, including those in hotels outside the definition, are taxed at the lower slab without credit. Whether a hotel's premises are specified premises depends on the value of the accommodation it supplied, measured against a threshold per unit per day.

The definition was reworked to apply by financial year. Our understanding is that this applied from April 2025: status is decided from the value of accommodation supplied in the preceding financial year. A hotel below the threshold may choose to opt in by declaration, and one that no longer qualifies may opt out. The status then holds for the whole year rather than changing with each night's price. Treat the timing and the declaration mechanics as points to confirm against the current notification.

In practice, a hotel's room pricing in one year fixes the restaurant's tax treatment in the next. If you run both, look at them together.

Rooms booked through platforms and section 9(5)

Most rooms booked through online travel platforms follow the ordinary route. The hotel is the supplier, charges and pays the GST, and the platform collects tax at source on the net value it passes on. Our guide to TDS and TCS under GST covers that collection.

Section 9(5) of the CGST Act changes this for notified services. For those, the electronic commerce operator pays the tax as if it were the supplier. Accommodation in hotels, inns, guest houses, clubs, campsites and other commercial places meant for lodging is a notified category. The liability shifts to the platform only in specified cases, broadly where the person supplying through it is not liable to register on its own account. A registered hotel above the threshold normally keeps the liability.

That is why a homestay or a small guest house listed on a platform can end up with the platform paying GST on the booking. The exact condition sits in the notification and has been amended over time, so read the current wording before deciding who invoices the tax. The same mechanism applies to food ordered through delivery apps, which the restaurant guide explains.

Place of supply: always where the property is

When the supplier and recipient are both in India, Section 12(3) of the IGST Act makes the place of supply for lodging accommodation by a hotel, inn, guest house, club or campsite the location of the property. The same rule covers services directly in relation to immovable property. Where the guest is registered, or which state they travel from, makes no difference.

So a hotel in Goa always charges CGST and SGST of Goa. A company registered only in Maharashtra that sends an employee there still gets a Goa intra-state invoice, with no IGST. Hotels that raise IGST because the guest's GSTIN has a different state code are making a common mistake. The full framework, including the proviso for property located outside India, is in our guide to place of supply rules.

Claiming ITC on business hotel stays

Hotel accommodation for business travel is not on the blocked list in Section 17(5). The blocked credits guide explains why stays and flights fall outside it. So credit is available in principle, subject to the ordinary conditions in Section 16: the stay is for business, you hold a tax invoice with your GSTIN, and the hotel has reported it so that it appears in your GSTR-2B. The input tax credit rules cover those conditions in full.

The practical obstacle is the place of supply. The hotel charges CGST and SGST of its own state, and that credit can be used only by a registration in that state. If your company is registered in Karnataka and your team stays in Delhi, the invoice needs your Delhi GSTIN. With no Delhi registration, the tax is a cost.

Three other points trip up travel desks:

• Invoices in the employee's name. An invoice made out to the traveller, with no company GSTIN, gives the company nothing to claim against.
• Bookings through a travel agent. If the agent is the one billed by the hotel, the agent holds the accommodation invoice. What you receive is the agent's own service invoice, and the room tax may not reach you as credit at all.
• Personal extensions. Nights added for leisure are personal consumption, and credit on them is blocked. Split the bill or reverse the credit for those nights.

Frequently asked questions