BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.
The hotel industry plays a big role in India’s tourism and business ecosystem. But with different GST rates for room tariffs, food, and event services, understanding taxation is key for both hotel owners and customers. In this guide, we break down how GST applies to the hotel industry in India, including room booking, dining, and service charges.
Yes. GST is applicable on:
The GST rate depends on the room price, not the hotel’s star category.
| Room Tariff per Night | GST Rate | With ITC (Input Tax Credit) |
|---|---|---|
| Less than ₹1,000 | Exempt | Not applicable |
| ₹1,001 to ₹7,499 | 12% | Yes |
| ₹7,500 and above | 18% | Yes |
| Food/Service | GST Rate | Type of Service |
|---|---|---|
| Restaurant dining (AC/non-AC) | 5% | Without ITC |
| Room service (from in-house restaurant) | 5% | Without ITC |
| Alcoholic beverages | Outside GST | State excise duty applies |
| Service Type | GST Rate |
|---|---|
| Spa & wellness center | 18% |
| Gym and fitness center | 18% |
| Laundry and ironing | 18% |
| Event space/conference hall | 18% |
If your hotel bill is itemized:
However, if everything is bundled under one rate (like a package), Goods and Services Tax (GST) is calculated based on the primary service category, usually the room tariff.
| Aspect | Effect |
|---|---|
| Budget hotels (₹<1,000 tariff) | More affordable (GST-exempt) |
| Mid-range hotels | 12% GST boosts competitive pricing |
| Luxury hotels (₹7,500+) | 18% GST may increase room cost |
| Food services in hotels | Uniform 5% GST simplifies billing |
| Banquet/events | Taxed at 18%, adds cost for big events |
Overall, GST brings transparency and standardization, but the absence of ITC on food services increases operational costs.
Understanding gst for hotel industry helps hoteliers optimize pricing, billing, and compliance—while also giving guests clarity on what they’re paying for. Whether you’re running a boutique hotel or a 5-star chain, being GST-savvy keeps your business guest-ready and tax-ready.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.