GST Billing Framework for Hotel / Resort with Restaurant declared as Specified Premises

The GST billing framework for hotels and resorts classified as specified premises outlines the tax treatment of various bundled and standalone services following the September 2025 amendment. Accommodation is taxed at 5% without input tax credit (ITC) for lower-value rooms and 18% with ITC for higher-value rooms, while services like restaurant, room service, catering, banquet, and spa attract 18% with ITC. The distinction between composite and mixed supply under the CGST Act, 2017 is critical: naturally bundled services such as room with breakfast or meal plans are treated as composite supplies and taxed based on the principal supply (accommodation), whereas unrelated bundled services at a single price are treated as mixed supply and taxed at the highest rate. Separate billing applies where services like food are availed independently. The framework also clarifies taxation for scenarios such as banquet bookings, wedding packages, corporate packages, and ancillary services, ensuring structured compliance and reducing classification disputes.

Current GST Rate Structure (Post Amendment dated 22^nd September 2025) –

Composite v. Mixed Supply (Statutory Position)

Composite Supply (Sec 2(30) + Sec 8)

• Naturally bundled
• Principal supply identifiable
• Tax = principal supply rate

Mixed Supply (Sec 2(74))

• Not naturally bundled
• Single price
• Tax = highest rate

Scenario Analysis specific use cases for Hotel/Resort with Restaurant as specified premises:

Scenario 1: Room + Breakfast Included (One price with everything included in tariff)

• Treated as composite supply (CBIC Circular support)
• Principal supply = accommodation

Tax:

• Lower slab rooms – 5% (Provided price charged with breakfast is less than 7,500)
• Higher slab rooms – 18% (Price charged incl Breakfast is more than 7,500)
• SAC Code: 996311

Scenario 2: MAP / AP Plans (Stay + Meals)

• Naturally bundled
• Composite supply

Tax:

• Lower slab rooms – 5% (Provided price charged with all food is less than 7500)
• Higher slab rooms – 18% (Price charged incl all food is more than 7,500)
• SAC Code: 996311

Scenario 3: Room + Food Separately Charged

Applicable where guest booked only accommodation earlier but once at the premise wants to have food also at the Hotel

• Not composite

Tax:

• Lower slab rooms (less than 7,500) – 5% (SAC Code: 996311)
• Restaurant – 18% (To be Billed separately) (SAC Code: 996331)
• Higher slab rooms (more than 7,500) – 18% (SAC Code: 996311)
• Restaurant – 18% (Suggested to be billed separately) (SAC Code: 996331)

Scenario 4: Room + Breakfast Included + Room Service availed (Lunch + Dinner)

(Initial single price with Breakfast included in tariff but Lunch and dinner were ordered later)

• Accommodation and breakfast treated as composite supply (CBIC Circular support)
• Principal supply = accommodation

Tax:

• Lower slab rooms → 5% (Provided price charged with breakfast is less than 7,500)
• Higher slab rooms → 18% (Price charged with breakfast is more than 7,500)
• SAC Code 996311

Lunch and Dinner are ordered separately in Room (as no prior information or price was available earlier) these would be taxable at 18%, SAC Code: 996332 – for room service

Scenario 5: Room + Breakfast Included + Lunch and Dinner at Restaurant

(Initial single price with Breakfast included in tariff but Lunch and dinner were later had at restaurant)

• Accommodation and breakfast treated as composite supply (CBIC Circular support)
• Principal supply = accommodation

Tax:

• Lower slab rooms → 5% (Provided price charged with breakfast is less than 7500)
• Higher slab rooms → 18% (Price charged with breakfast is more than 7,500)
• SAC Code 996311

Since guest had Lunch and Dinner at Restaurant these are separate service and the guest would be taxable at 18% which is the rate for Restaurant with SAC code of 996331

Scenario 6: Banquet + Catering

Single price:

• Composite supply
• Principal = catering if price given on per headcount or per plate basis.

Tax:

• 18%
• Catering SAC code to be used 996331

Scenario 7: Banquet (without food)

Let us say a corporate event/ meeting without food or food ordered on a la-carte basis

Tax:

• 18%
• SAC code to be used 997212 (Renting of premises)
• In case food ordered SAC to be used for Restaurant – 996331

Scenario 8: Wedding Package

Genuine bundle

• Mixed supply
• SAC code to be used 996331 (Catering / Restaurant)

Tax: Highest rate → 18%

• May include services like ground booking, banquet, providing DJ/Sound, Rooms, Food, Spa, Pool etc.

Scenario 9: Pool / Spa

• Included – composite – taxed as room (5% / 18%)
• Separate – 18%

Scenario 9: Ground / Lawn Renting (in isolation)

• SAC to be used for 997212 – Renting of immovable property
• Tax: 18%

Scenario 10: Corporate Package

Single price given to corporate:

Risk of classification dispute

• Conservative approach – bill everything at 18% if possible do not provide any breakup
• SAC code to be used – 996331 assuming Principal supply to be Catering
• SAC code to be used – 997212 assuming Principal supply to be renting of hall

Separate quote to Corporate and separate billing (recommended):

• Room – 18% (996311)
• Banquet Hall – 18% (997212)
• Catering – 18% (996331)

Scenario 11: Miscellaneous Services

• May include services like Laundry, dry cleaning, Costume rental / sale, pool usage, any other services,
• Rate and SAC code to be decided on case to case basis.
• For eg. 999719 – to be used for Laundry / dry cleaning

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For any other queries please reach out to us- Agarwal Sanjiv & Company, Chartered Accountants, 503, Gurukripa Tower, C-43, Mahaveer Marg, C-Scheme, Jaipur-302001, Phone: 0141-2368071, Mob. 8588831124