New GST for Hotel Rooms in India: Tax Rate Based on Tariff
- New GST rates for hotel rooms in India depend on the room tariff, with 0% for tariffs below ₹1,000, 5% for ₹1,001–₹7,500 (no input tax credit), and 18% for tariffs above ₹7,500 (with input tax credit).
- GST is applied based on the declared room tariff before any discounts, meaning a room originally priced at ₹8,000 but discounted to ₹6,500 still incurs 18% GST.
- Hotel services like in-room dining, banquet services, and spa treatments have separate GST rates, with in-room dining taxed at 5% if billed with the room and 18% if billed separately.
- Input Tax Credit (ITC) can be claimed on GST paid for business-related hotel stays, provided the business is GST-registered and a valid tax invoice is issued.
- GST is applicable to the declared room tariff, not the discounted price, ensuring standard tax application regardless of promotions or discounts.
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 has revised and clarified the GST structure applicable to hotel room tariffs effective 22nd September 2025. GST on hotel rooms continues to be charged based on the room tariff per night, and the applicable rate depends on the price bracket the room falls into.
Below is the updated GST structure, along with the earlier applicable rates for reference (no compensation cess applicable):
GST on Hotel Room Tariff (Per Night)
| Room Tariff (Per Night) | GST Rate (After 22nd Sept 2025) |
GST Rate (Before 22nd Sept 2025) |
Conditions |
|---|---|---|---|
| Below ₹1,000 | 0% | 0% | Exempt from GST |
| ₹1,001 – ₹7,500 | 5% (No ITC) | 5% (No ITC) | Mid-segment stays; Input Tax Credit not available |
| Above ₹7,500 | 18% (With ITC) | 18% (With ITC) | High-end and luxury hotels; Input Tax Credit available |
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
Room Tariff (Per Night)
GST Rate
(After 22nd Sept 2025)
GST Rate
(Before 22nd Sept 2025)
Conditions
Example Calculation
Suppose a hotel room has a declared tariff of ₹8,000 per night, but you receive a discount and pay ₹6,500.
Since the declared tariff exceeds ₹7,500, the applicable GST rate will be 18%.
GST = 18% of ₹8,000
GST = ₹1,440
So, even though you are paying ₹6,500 after discount, the GST rate applied will be based on the original declared tariff of ₹8,000.
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HSN Code for Hotel Services
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% / 5% / 18% |
| Convention services | 996334 | Hall rentals, wedding venues | 18% |
Service Type
HSN Code
Description
GST Rate
Service Type
HSN 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 is based on declared tariff, not on discounted price.
- So if a ₹10,000 room is offered at ₹6,999 due to an offer, GST is still charged at 18%.
This rule ensures standard tax application regardless of promotions or discounts.
Other Hotel Services and Their GST Rates
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% |
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
Service Type
GST Rate
GST on these is applicable only if billed separately.
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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.
