Latest Amendments of Hotel Industry and Restaurants

Introduction

For Hotel Industry Two Important Notification has been declared on 16^th Jan, 2025 and it’s necessary to know those changes as far as GST Compliance is concerned. This Notification issued are important so one can decide from 1^st April, 2025. Whether they have to give any Declaration and What is the Tax Burden exactly on them are the questions which comes up in the mind of readers of the Notifications issued recently. Let’s know and understand what has been declared in Notifications i.e. Notification 05/2025 – CT (Rate) Dated 16-01-2025 and Notification No. 08/2025 – CT (Rate) Dated 16-01-2025.

1. Notification 05/2025 – CT (Rate) Dated 16-01-2025

Vide Notification 05/2025 – CT (Rate) Dated 16-01-2025 following changes have been made:

• Introduction of “Specified Premises” Concept
• Omission of “Declared Tariff” Concept
• Filing of Opt-In Declaration by 31-03-2025 using Annexure VII, VIII, IX of the Notification

< Let’s understand this different Annexure inserted by this Notification in brief

> Annexure VII – Opt-In Declaration for Registered Person and Annexure IX Opt-Out Declaration has to filled for a Financial Year and has to be filled on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year and for each premises filed separately before the jurisdictional GST authority.

> Annexure VIII – Opt-In Declaration for Person Applying for Registration have to be filed separately for each premises before the jurisdictional GST authority.

 2. Notification No. 08/2025 – CT (Rate) Dated 16-01-2025

The above Notification(supra) stipulated that Electronic-Commerce Operator i.e. E-Com Operator shall no longer be liable to pay GST in respect of restaurant services provided by restaurants opting for “specified premises” status.

Specified Premises means –

▪️ A premises from where the supplier has provided in the preceding financial year, hotel accommodation service having the value of supply of any unit of accommodation above ₹7500 per unit per day or equivalent; or
▪️ A premises for which a registered person supplying hotel accommodation service has  filed a declaration on or after 1st January and not later than 31st of March of the preceding financial year, declaring the said premises to be a specified premises
▪️ A premises for which a person applying for registration has filed a declaration within 15 days of obtaining acknowledgement for the registration application, declaring the said premises to be a specified premises.

Things to be Keep in Mind

• Option once exercised cannot be changed during the year and once it is filled it’s not necessary to file Opt-In Declaration for subsequent Financial Year and it will be effective unless it Opt-Out Declaration has been filled in this regard for each premises separately.
• This Opt-Out Declaration has to be filled on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year which is same as discussed in Opt-In Declaration.

GST Rates for Restaurant Services

GST Rates for Restaurant Services w.e.f. 01-04-2025 are as follows:

Standalone Restaurants

Here, Standalone Restaurants not attached to any hotel.

Specified Premises

Restaurants located in Hotels where the supplier has provided in the preceding financial year, ‘hotel accommodation’ service having the value of supply of any unit of accommodation above Rs. 7500 per unit per day or equivalent.

Where value has not exceeded Rs. 7500 but the restaurant has submitted an opt-in declaration.

Restaurant less than 7500

Restaurant located in hotels where the supplier has provided in the preceding financial year, ‘hotel accommodation service having the value of supply of any unit of accommodation not exceeding Rs. 7500 per unit per day and it has not submitted an opt-in declaration.

Genesis of Specified Premises Term

The term “Specified Premises” has been introduced on 28^th Nov, 2021 w.e.f. 01-01-2022 by Notification No. 17/2021-Central Tax (Rate) dated 18th November, 2021 which amended Notification No.17/2017- Central Tax (Rate), dated the 28th June, 2017 in the Notification

(ii) after clause (iii), the following clause shall be inserted, namely:-

(iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises.

In Explanation, –

(ii) after item (b), the following shall be inserted namely, –

(c) specified premises means premises providing hotel accommodation service having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.

The notification shall come into force with effect from the 1st day of January, 2022.

Genesis of Declared Tariff Concept

The concept of Declared Tariff has been introduced by Notification No. 20/2019- Central Tax (Rate) dated 18th November, 2021 which is having effect from the 1st day of October, 2019.

> Prior to its omission, clause (xxxv) in paragraph 4 relating to explanation read as under in Notification No. 20/2019- Central Tax (Rate) dated 18th November, 2021:

(xxxv) Declared tariff means charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding and discount offered on the published charges for such unit.

> The above has been omitted by Notification 05/2025 – CT (Rate) Dated 16-01-2025 w.e.f. 1^st April 2025.

Epilogue

Although, what was introduced by the concept of specified premises has been amended and concept of Declared Tariff has been removed from 1^st Jan, 2022 in hotel industry has been amended by issuing this Two Notification in the Middle of January 2025. Its necessary for the Hotel Owners i.e. GST Taxpayer to file their Opt-In Declaration before 31^st march, 2025 if they are having Specified Premises and Restaurant is situated in such Specified Premises and it is More than 7500 value of supply per day per accommodation then in such situation Opt-In Declaration given in Annexure VII has be filled before 31^st March, 2025 and for those specified premises the Ecommerce Operator not has to Pay GST U/S 9(5) of CGST Act and instead the levy swifts to the Restaurant owner and GST Rate attracted at the Rate of 18% with ITC Allowance and in case of  a New Registration of GST Applied in such case in Annexure VIII Once the ARN No generated within 15 days of ARN No. for Each Specified Premises for the Financial Year.

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Author: Miss Zalak Sohil Dalal – Advocate| B.com, LL.B., LL.M. | Advocate & Tax Consultant, Surat.

Miss Zalak Sohilkumar Dalal, a 28-year-old practicing advocate and tax consultant based in Surat, specializes in GST and Income Tax. With over seven years of experience, she has been enrolled with the Bar Council of Gujarat and Bar Council of India since 2020. She holds a Master of Law in Human Rights from VNSGU, Surat, and has a strong academic background, including certifications in cyber law. Miss Dalal has achieved notable milestones, such as serving as a managing committee member for the Western Zone of the All India Federation of Tax Practitioners (AIFTP) for 2024-25 and delivering lectures on GST-related topics. She has also published multiple articles in reputed tax journals, focusing on GST provisions and procedural nuances. Her professional engagements extend to active participation in legal study circles and refresher courses. Additionally, she represented VNSGU in basketball at the university level during her undergraduate studies.