Rakshith Madhusudhan 

We all know that GST rates for restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging, is 5%. However, if you run a restaurant in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging the GST rates would either be 5% or 18% depending on facts and circumstances mentioned in the subsequent paras.

For better understanding, first let’s quickly go through the GST rates applicable for hotel rooms.

Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having value of supply i.e. realised amount.

Realised amount per room/person per night GST Rates
Less than Rs.1,000 0%
Rs.1,000 – Rs.2,499 12%
Rs.2,500 – Rs.7,499 18%
Rs.7,500 and above 28%

(as mentioned under SAC 9963)

NOTE : GST on hotel rooms depends upon realised amount and not on declared tariff.

“Declared tariff” includes 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 any discount offered on the published charges for such unit.

Now that we are aware of the slab rates of hotel room, let’s discuss on the GST rates for Restaurants inside the hotel, which depends upon declared room tariff and not on realised amount.

If the Declared room tariff is:

  • 7,500 and above   –   GST @ 18%
  • Otherwise  –   GST @ 5%

Hotel restaurant’s GST tax rate also affects whether or not you can claim the Input Tax Credit. If you fall into the 18% bracket, you are allowed to use the Input tax credit for all of the goods you purchase to use in your restaurant. If your hotel restaurant falls into the 5% bracket, you cannot claim Input Tax Credit.

Check out the below illustration for better understanding.

Problem:

Mr. X, books a room in a hotel for 1 nights. The declared tariff of the room is Rs.7,500. However, upon mutual consent Mr. X agreed to pay only Rs.7,000

Now,

1) What is the GST on Hotel room?

2) What is the GST on Restaurant bill inside the Hotel?

Analysis:

1) Since the GST on hotel room depends on the amount received i.e. Rs.7,000, this falls    under 18% slab rate. Hence total amount payable including GST by Mr. X is Rs.8260 ( 7000 + 1260 ).

2) GST on restaurant bill inside the hotel depends on the declared tariff. Even though the amount agreed by Mr. X is Rs.7,000, the declared tariff of the room per night is Rs.7,500 and accordingly the restaurant bill attracts 18% GST.

More Under Goods and Services Tax

20 Comments

  1. MANI says:

    my boss stayed in England for a company conference and the bill comes to 18000 Euros. bill contains VAT. Can we claim input on through this bill

  2. Ankita Gupta says:

    I booked a room on Sept 2019 for our stay in October 2019. The online booking portal charged us on previous tax rates only, they refused to return the difference from 18% to 12%, saying that since the booking was made in September. I am eligible to claim the difference amount back?

  3. Sunil talwar says:

    I recently booked a room in a hotel with check in on 29/08/2019 and check out on 31/08/2019 but due to some confusion we arrived at the hotel on 28/08/2019
    Now we requested the hotel to let us check in for 1 day and charge extra for that night but they insisted we cancel the entire booking and on which one night will be chargeable as cancellation fees
    Now i want to to know whether GST is applicable on the cancelled booking since we stayed on 29/08/2019 and have also paid GST for that day

  4. Nitin Kolambkar says:

    Dear Sir,

    We Would appreciate if you can explain how do we calculate GST if hotel room is booked for more than 1day.

    For Example
    Pax name XYZ booked hotel for 3 days @ 2600/- + % GST.

    What will be calculations?

    Whether 18% GST charge on 2600/- = 468 INR as per slab rate OR

    28% on (2600 x 3 Days) = 7800 x 28% GST= 2184/-

    Please Clarify

  5. pratip bose says:

    I want to know that if hotel room’s tariff per day is Rs.999=00 then there is no GST applicable but if that guest continue to stay for 10 days and the bill amount becomes Rs.9,990=00 will there be any GST applicable ?

    1. VIJAY KUMAR says:

      The rule is based on, amount realized should be less Rs.1000 per night / per person so if the hotel is booked for more days and the charges are less than Rs. 1000 per night/per person. The exemption will be calculated per night basis and the customer is eligible for exemption.

  6. Xavier says:

    Room tariff agreed with a guest 7000. He pays 18% GST. After check in to the hotel, the hotel up sells him to a different category of room with addition pay of 2000. Now the total tariff for the day is 9000. Does he pay 28% on the whole of 9000 ? or he pays 18% on 2000 also.Appreciate if this can be clarified.
    Thanks

  7. Aishwarya says:

    Room tariff of the hotel is 2400,guest asks for additional bed and it charges 500,then what will be the GST rate applied this
    12 or 18%

  8. Sharat says:

    Mr dhruv- ur issue answer lies in section 12 or 13 of IGST act. I believe its location of immovable property. Hence, hotel to charge. CGST AND SGST Only

  9. YASHPAL says:

    thanku. i want to know tax rate where hotel provide room on rent, food (indor catering), and pandal service. but will tax liability. itc available or not

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