---
title: "New GST for Hotel Industry 2026: 0% / 5% / 18% Rate on Hotel Services"
description: "New GST rate for hotel industry in 2026 is 0% to 18% based on room tariff and accommodation type. Busy helps you apply the right GST rate on every invoice."
canonical: "https://busy.in/gst-rates/hotel-industry/"
author: "Apurva Maheshwari"
published: "2025-05-19T15:29:03.000Z"
category: "GST Rates"
---

-   Hotel accommodation services with a value of supply up to ₹7,500 per unit per day attract **5% GST without ITC** from 22 September 2025.
-   Hotel accommodation services above ₹7,500 per unit per day continue to attract the applicable GST rate as per the prescribed classification.
-   Restaurant and food services in hotels are taxed separately based on the applicable GST provisions.
-   Other hotel services such as spas, gyms, laundry, and event services are taxed according to their applicable GST classification.
-   Businesses should issue invoices with the correct GST rate and follow applicable ITC rules.

# New GST for Hotel Industry: Room Tariff Slabs and Food Services Tax

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 hotel gst rate, including room booking, dining, and service charges.

## **New GST on Hotel Rooms and Services**

The Government of India revised GST applicability on hotel accommodation and related services effective **22 September 2025**. The updated structure simplifies taxation by removing the earlier **12% GST slab for hotel rooms** and introducing clearer rate brackets based on the room tariff.

GST on hotel services applies to several offerings such as **room accommodation, restaurant dining, room service, banquet halls, and other hotel amenities**. **No compensation cess applies to hotel services.**

## GST on Hotel Room Tariffs in India

Hotel room GST is calculated based on the **declared room tariff before discounts**, not on the hotel’s star rating.

| Room Tariff per Night | GST Rate (After 22 Sept 2025) | GST Rate (Before 22 Sept 2025) | ITC Availability |
| --- | --- | --- | --- |
| Less than ₹1,000 | 0% (Exempt) | Exempt | Not applicable |
| ₹1,001 – ₹7,499 | 5% | 12% | No |
| ₹7,500 and above | 18% | 18% | Yes |

**Key change:** Mid-range hotels that were earlier taxed at **12% GST now fall under the 5% slab**, though **Input Tax Credit is not available**.

## GST on Hotel Food, Restaurant Dining, and Room Service

Food services in hotels follow the same GST rules as standalone restaurants.

| Food/Service | GST Rate | ITC Availability |
| --- | --- | --- |
| Restaurant dining (AC or Non-AC) | 5% | No |
| Room service from hotel restaurant | 5% | No |
| Alcoholic beverages | Outside GST | State excise duty applies |

This uniform **5% GST on restaurant food** simplifies billing for both standalone restaurants and hotel dining services.

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## GST on Other Hotel Services (Spa, Gym, Laundry, Events)

Additional services offered by hotels generally fall under the **18% GST slab**.

| Service Type | GST Rate |
| --- | --- |
| Spa & wellness center | **5% (without ITC)** |
| Gym and fitness center | **5% (without ITC)** |
| Laundry and ironing | **18%** |
| Event space / banquet hall / conference hall | **18%** |

ITC availability depends on the nature of the service and applicable GST provisions.

## **Composite vs Itemized Hotel Billing**

Hotel invoices may either be itemized or bundled, which affects how GST is calculated.

## **Itemized Billing**

Each service is taxed separately:

-   Room tariff → taxed as per applicable hotel accommodation GST slab
-   Food → taxed at 5% GST (where applicable)
-   Spa, gym, laundry → taxed as per the applicable GST classification

## **Package Billing**

If multiple services are bundled together (for example, stay + meals + spa), GST treatment depends on whether the supply qualifies as a composite supply or mixed supply under GST provisions. The applicable GST rate is determined accordingly.

## **How to Calculate GST on Room Tariff and Food Services**

Assume stay is within the same state (so CGST + SGST).

**Room charges**

-   Room tariff: ₹3,500 per night

-   Nights: 2

-   Room value: ₹3,500 × 2 = ₹7,000

-   GST @ 5%: ₹350

-   -   CGST @ 2.5%: ₹175

    -   SGST @ 2.5%: ₹175

Room total: ₹7,350

**Food bill**

-   Food value: ₹1,200

-   GST @ 5%: ₹60

-   -   CGST @ 2.5%: ₹30

    -   SGST @ 2.5%: ₹30

-   Food total: ₹1,260

Grand total payable = ₹7,350 + ₹1,260 = ₹8,610

## **Conclusion**

Understanding **gst for hotel industry** helps hoteliers optimise 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.

## About the author

**Apurva Maheshwari**

I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.

## Frequently asked questions

### What is the GST rate on hotel room in India?

-   **0% for** rooms under ₹1,000
-   **5% for** ₹1,001-₹7,499
-   **18% for** ₹7,500 and above

### Is GST applicable on food in hotels?

**Yes, food** ordered from hotel restaurants or through room service attracts 5% GST, without input tax credit.

### Can hotels claim ITC on purchases?

Hotels cannot claim ITC on inputs and services used exclusively for supplies taxed at the concessional **5% GST rate without ITC**.

For other taxable supplies, ITC availability depends on the applicable GST provisions, eligibility conditions, and proportionate reversal rules where applicable.

### What is the GST on laundry or spa service at hotels?

Laundry and spa services charged separately by hotels are taxed as per their applicable GST classification.

-   Laundry services generally attract **18% GST**.
-   Spa and wellness services attract **5% GST without ITC** where covered under beauty and physical well-being services.

### What's the GST impact on hotel industry in India?

**It brought** clarity but increased tax burden on luxury services and removed ITC on food, which affects hotel profit margins.

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