Latest Amendments in GST related to Hotels & Restaurants

Govinda Rao Vysyiraju, Tax Advocate

The Interlocution of the Goods & Services Tax (GST) in India brought significant changes to various industries, including hospitality sector.  GST has impacted the operations, pricing and overall business environment of hotels and restaurants.  In this Article, we will discuss the GST Latest Amendment of Hotels & Restaurant Services.

Recently the Government has issued Two Notifications on 16.01.2025 and it’s necessary to know those changes as far as GST Compliance is concerned.  Which is important so one can decide from 01^st April, 2025.  Whether they have to give any Declaration and What is the tax burden exactly on them which comes up in the mind of readers of the Notification No. 05/2025 – CT (Rate) Dated 16-01-2025 and Notification No.8/2025-CT (Rate) Dated 16.01.2025.

Notification No 05/2025-CTR:

The Notification No 05/2025-CTR issued to make the amendment in Definition of Specified Premises. By  virtue of this notification, the term Declared Tariff will no longer be used as this word has been omitted from 01-04-2025 from the Notification No 11/2017 -Central tax (Rate) -dated 28-06-2017.

The government has omitted Clause (xxxv) in Explanation of Notification No 11/2017-Central tax (Rate). The clause was for Declared Tariff. Now, GST will be linked to actual price a customer pays for hotel rooms. Hence from 01-04-2025, the term declared tariff will not be in used only the actual price of hotel rooms will be relevant for payment of GST.

In 55th GST Council, the government has proposed to amend the definition of Specified premise.  By this notification the government has substituted clause (xxxvi) which is related to Specified Premises.

The New definition of Specified Premises are as under:

SPECIFIED PREMISES, FOR A FINANCIAL YEAR, MEANS: –

(a) 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 seven thousand five hundred rupees per unit per day or equivalent; or
(b) a premises for which a registered person supplying ‘hotel accommodation’ service has filed a declaration, on or after the 1st of January and not later than 31st of March of the preceding financial year, declaring the said premises to be a specified premises; or

c) a premises for which a person applying for registration has filed a declaration, within fifteen days of obtaining acknowledgement for the registration application, declaring the said premises to be a specified premises;”

The filing of Opt-in Declaration Form by 31^st March, 2025 using Annexure VII, VIII and IX of the notification. Let’s understand this different Annexures 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.

“Annexure VII

OPT-IN DECLARATION FOR REGISTERED PERSON

(See para 4(xxxvi))

Declaration by a registered person supplying hotel accommodation service before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.

Reference No.-
Date: –

1. I/We ……………………. (name of Person) do hereby declare that the premises at ……(address)…… shall be a ‘specified premises’ for the Financial Year ………(yyyy-yy)……….

2. Further, I/We understand the said declaration will apply to the entire Financial Year specified in (1) above and will continue to apply to subsequent Financial Years also, unless I/We declare the premises as not a ‘specified premises’ by filing a declaration in the format specified at Annexure IX.

Legal Name: –

GSTIN: –

PAN No.

Name of Authorized Signatory:

Signature of Authorized Signatory:

(Dated acknowledgment)

Note: 1. The above declaration, declaring the premises as a ‘specified premises for a Financial Year, shall be filed by a registered person on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year.

2. The above declaration shall have to be filed separately for each premises.

Annexure VIII

OPT-IN DECLARATION FOR PERSON APPLYING FOR REGISTRATION

(See para 4(xxxvi))

Declaration by a person applying for registration before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.

Reference No.-
Date: –

1. I/We ……………………. (Name of Person) have applied for registration vide ARN No. ………………………. and do hereby declare that the premises at ……(address)…… shall be a ‘specified premises’ from the effective date of registration till the end of the Financial Year.

2. Further, I/We understand the said declaration will apply to the subsequent Financial Years also, unless I/We declare the premises as not a ‘specified premises’ by filing a declaration in the format specified at Annexure IX.

Legal Name: –

ARN: –

PAN No.

Name of Authorized Signatory:

Signature of Authorized Signatory:

(Dated acknowledgment)

Note: The above declaration shall have to be filed separately for each premises.

Annexure IX

OPT-OUT DECLARATION

(See para 4(xxxvi))

 Declaration by a registered supplier of hotel accommodation service before the jurisdictional GST authority declaring the premises as not a ‘specified premises’.

Reference No.-
Date: –

1. I/We ……………………. (name of Person) do hereby declare that the premises at ………(address)…… shall not be a ‘specified premises’ for the Financial Year ………(yyyy-yy)………

2. Further, I/We understand the said declaration will apply to the entire Financial Year specified in (1) above and will continue to apply to subsequent Financial Years also, unless I/We declare the premises to be a ‘specified premises’ by filing a declaration in the format specified at Annexure VII.

Legal Name: –

GSTIN/ARN: –

PAN No.

Name of Authorized Signatory:

Signature of Authorized Signatory:

(Dated acknowledgment)

Note:

The above declaration, declaring the premises as not a ‘specified premises’ for a Financial Year, shall be filed on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year.

The above declaration shall have to be filed separately for each premises.”.

Notification No 08/2025-CTR:

Notification No. 08/2025-Central Tax (Rate), dated January 16, 2025, introduces an amendment to the Central Goods and Services Tax (CGST) Act, specifically addressing the definition of “specified premises.” This update replaces item (c) in the previous Notification No.17/2021,-CT (Rate) dated 18th November 2021. The revised notification aligns the term “specified premises” with the definition given in clause (xxxvi) of paragraph 4 of Notification No. 11/2017-Central Tax (Rate). The amendment will take effect from April 1, 2025.

G.S.R. 47(E).—In exercise of the powers conferred by sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification number 17/2017- Central Tax (Rate), of the Government of India, in the Ministry of Finance (Department of Revenue), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E) dated the 28th June, 2017, namely:- 1. In the said notification, in the Explanation, for item (c), the following shall be substituted, namely, –  “specified premises” has the same meaning as assigned to it in clause (xxxvi) of paragraph 4 of notification number 11/2017-Central Tax (Rate) dated 28.06.2017.”. 2. This notification shall come into force with effect from the 1 st day of April, 2025

Note: – The principal notification number 17/2017 -Central Tax (Rate), was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E), dated the 28th June, 2017 and was last amended by notification number 16/2023-Central Tax (Rate), published in the Gazette of India, Extraordinary, vide number G.S.R. 771(E), dated 19th October,2023.

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 Rs. 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,-CT (Rate) dated 18th November 2021 which amended Notification No.17/2021,-CT (Rate) dated 18th November 20217 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 No. 05/2025 – CT (Rate) Dated 16-01-2025 w.e.f. 1st April 2025.