New GST for Hotel Industry: Room Tariff Slabs and Food Services Tax
- The hotel gst rate depends on the value of accommodation supply and applicable GST classification.
- 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.
- 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.
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.
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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.
The gst on hotels applies to accommodation, restaurant dining, room service, banquet halls, and other hotel amenities based on applicable GST provisions. 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 |
Room Tariff per Night
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
ITC Availability
Room Tariff per Night
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
ITC Availability
Room Tariff per Night
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
ITC Availability
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
The gst on hotel food follows the same GST rules as standalone restaurant services, with restaurant dining and room service generally attracting 5% GST without ITC.
| 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 |
Food/Service
GST Rate
ITC Availability
Food/Service
GST Rate
ITC Availability
Food/Service
GST Rate
ITC Availability
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 are taxed according to their applicable GST classification. Services such as spas and fitness centres attract 5% GST without ITC, while other services may attract GST based on their classification.
| 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% |
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
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
The gst on hotel food is generally calculated separately from room charges and depends on the applicable restaurant service GST rate.
- 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.
