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Booking a hotel room in India? Whether it’s for a vacation, a business trip, or a weekend getaway, it’s important to know how much of your bill goes to taxes. This guide explains the GST (Goods and Services Tax) rates applicable to hotel stays based on room tariffs and provides insights on HSN codes, input tax credits, and exemptions.
Under GST, hotel accommodation is taxed based on the declared room tariff per night. The higher the tariff, the higher the GST rate.
Here’s a quick look:
| Room Tariff (per night) | GST Rate | Conditions |
|---|---|---|
| Below ₹1,000 | 0% | Exempt from GST |
| ₹1,001 – ₹7,500 | 12% | Applies to most 2-star to 3-star stays |
| Above ₹7,500 | 18% | High-end & luxury hotels |
Tariff = declared rate before discount
So, even if you get a discount and pay ₹6,500 for a room originally priced at ₹8,000, 18% GST will still apply.
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Hotel and accommodation services fall under the HSN code 9963, which is used for classifying services related to lodging, boarding, and other accommodations.
| Service Type | HSN Code | Description | GST Rate |
|---|---|---|---|
| Hotel accommodation | 996311 | Lodging services by hotels, inns, guest houses | 0% / 12% / 18% |
| Convention services | 996334 | Hall rentals, wedding venues | 18% |
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Let’s say you book a room for ₹5,000 per night for 3 nights:
If the room tariff were above ₹7,500 per night, GST @18% would be applicable.
Businesses that incur hotel expenses for official purposes can claim Input Tax Credit (ITC) on GST paid, provided:
However, ITC is not available for personal travel or entertainment expenses, as per Section 17(5) of the CGST Act.
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It’s important to remember:
This rule ensures standard tax application regardless of promotions or discounts.
Hotels often offer services in addition to room stays, like spa treatments, restaurants, and conference halls. These are taxed separately:
| Service Type | GST Rate |
|---|---|
| In-room dining | 5% (no ITC) if billed with room, else 18% |
| Banquet services | 18% |
| Laundry & spa | 18% |
| Mini-bar items | 18% |
GST on these is applicable only if billed separately.
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Whether you’re booking a budget stay or a luxury suite, knowing the GST rates helps you avoid surprises on your final bill. For business travelers, understanding input credit rules ensures proper tax planning. The key takeaway—GST on hotels is slab-based, and the final cost can differ significantly depending on your room tariff and add-on services.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.