New GST for Hotel Rooms in India: Tax Rate Based on Tariff
- New GST rates for hotel rooms in India depend on the value of accommodation service per unit per day. Hotel rooms with a value up to ₹7,500 per unit per day attract 5% GST without Input Tax Credit (ITC) from 22 September 2025.
- Before 22 September 2025, hotel accommodation services up to ₹7,500 per unit per day attracted 12% GST with ITC. This category was revised to 5% GST without ITC from 22 September 2025.
- GST on hotel accommodation is calculated as per the applicable GST valuation provisions and value of supply.
- Hotel services like restaurant dining, room service, banquet services, and spa treatments have separate GST treatment based on their applicable classification.
- Input Tax Credit (ITC) availability depends on the nature of the expense, type of supply, and applicable GST conditions.
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 hotel room hsn code and gst rates, input tax credits, and exemptions.
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New GST Rate on Hotel Rooms in India
The Government of India revised the GST structure applicable to hotel room tariffs effective 22 September 2025. GST on hotel accommodation continues to be charged based on the applicable room tariff/value of supply category.
Below is the updated GST structure, along with the earlier applicable rates for reference:
GST on Hotel Room Tariff (Per Night)
| Room Tariff (Per Night) | GST Rate (After 22nd Sept 2025) | GST Rate (Before 22nd Sept 2025) | Conditions |
|---|---|---|---|
| Up to ₹7,500 | 5% (Without ITC) | 12% (With ITC) | Hotel room HSN code and GST rate 5% applies for accommodation services up to ₹7,500 per unit per day without ITC. |
| Above ₹7,500 | 18% (With ITC) | 18% (With ITC) | Higher-value hotel accommodation services |
Room Tariff (Per Night)
GST Rate (After 22nd Sept 2025)
GST Rate (Before 22nd Sept 2025)
Conditions
Room Tariff (Per Night)
GST Rate (After 22nd Sept 2025)
GST Rate (Before 22nd Sept 2025)
Conditions
Example Calculation
Suppose a hotel room has an original tariff of ₹8,000 per night, but after discount, the customer pays ₹6,500.
Since the actual value of supply is ₹6,500, the applicable GST rate will be based on the applicable room tariff/value of supply provisions.
GST = 5% of ₹6,500
GST = ₹325
Total amount payable = ₹6,825
GST calculation should be based on the applicable value of supply under GST rules.
SAC Code for Hotel Services
Understanding the hotel room rent HSN code and GST rate helps businesses correctly identify the applicable classification and GST rate for accommodation services.
Hotel accommodation services fall under SAC 996311, which is used for classifying lodging services provided by hotels, inns, guest houses, and similar accommodation providers.
| Service Type | SAC Code | Description | GST Rate |
|---|---|---|---|
| Hotel accommodation | 996311 | Lodging services by hotels, inns, guest houses and similar accommodation services | 5% (Without ITC) for accommodation value up to ₹7,500 per unit per day; 18% (With ITC) for higher-value accommodation services |
| Convention services | 996334 | Hall rentals, wedding venues and similar event services | 18% |
Service Type
SAC Code
Description
GST Rate
Service Type
SAC Code
Description
GST Rate
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How to Calculate GST on Hotel Bookings
Let’s say you book a room for ₹5,000 per night for 3 nights:
- Base Amount = ₹15,000
- GST @5% = ₹750
- Total Bill = ₹15,750
If the room tariff were above ₹7,500 per night, GST @18% would be applicable.
Input Tax Credit (ITC) for Businesses
Businesses that incur hotel expenses for official purposes can claim Input Tax Credit (ITC) on GST paid, provided:
- The stay is used for official business purposes
- A valid tax invoice with GSTIN is issued
- The business is GST-registered
However, ITC is not available for personal travel or entertainment expenses, as per Section 17(5) of the CGST Act.
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GST on Room Tariff vs Actual Payment
It’s important to remember:
- GST on hotel accommodation is determined based on the applicable value of supply under GST provisions.
- The GST rate is not automatically decided based on the original room price before an eligible discount.
For example, if a room with an original price of ₹10,000 is offered at ₹6,999 after a valid discount, the applicable GST treatment will depend on the value of supply and relevant GST provisions.
This ensures GST is calculated according to the applicable valuation rules.
Other Hotel Services and Their GST Rates
Hotels often offer additional services apart from room accommodation, such as restaurants, banquet facilities, laundry, and wellness services. These services have separate GST treatment based on their applicable classification.
| Service Type | GST Rate |
|---|---|
| In-room dining | Applicable GST rate based on restaurant service classification |
| Banquet services | 18% |
| Laundry services | 18% |
| Spa and wellness services | Applicable GST rate based on the nature and classification of the service |
| Mini-bar items | Applicable GST rate based on product classification |
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
GST treatment depends on the nature of the service and applicable GST provisions.
Final Thoughts
Whether you’re booking a budget stay or a luxury suite, knowing the hotel 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.
