GST on Hotel Rooms: Rates, Slabs & Examples

GST Rate on Hotel Rooms in India

Two slabs. ₹7,500 is the line.

Room price per night	GST rate	ITC
Up to ₹7,500	5%	No
Above ₹7,500	18%	Yes

Effective 22 September 2025, per the 56th GST Council. The slab is based on the actual price charged to the guest.

A guest at your Jaipur front desk asks why the bill shows GST. Which slab applies today, and does it match what you charged on MakeMyTrip? GST on hotel rooms is simpler than it used to be: two rates, one threshold. This guide covers both, with worked examples and the rules for lodges, resorts and F&B.

GST Rates on Hotel Rooms at a Glance

The 56th GST Council meeting, effective 22 September 2025, replaced the old three-slab structure with a clean two-slab system. The rate depends on the actual price you charge the guest per room per night.

Room price per night (actual)	GST rate	ITC available	Who does this affect
Up to ₹7,500	5%	No	Budget hotels, guesthouses, most homestays
Above ₹7,500	18%	Yes	Business hotels, resorts, upscale properties

The tax is split equally into CGST and SGST on every intra-state booking. A room priced at ₹5,000 adds ₹250 GST. A room priced at ₹9,000 adds ₹1,620 GST. Both examples use the same rule: rate times price.

            ITC (Input Tax Credit) explained: ITC means you can deduct the GST you paid on your business purchases from the GST you owe on room revenue. Hotels in the 18% slab benefit from this. Hotels in the 5% slab do not get this offset, so their net cost on inputs is higher.
          

How the ₹7,500 Threshold Works

The threshold is based on the actual price charged to the guest, not a rack rate or a tariff card on the wall. This changed from 1 April 2025, when Notification 05/2025-Central Tax (Rate) removed the old "declared tariff" concept from the law.

What this means in practice:

You sell a room at ₹7,000 even though your rack rate is ₹9,500. The guest pays ₹7,000. That booking falls in the 5% slab.
You sell a room at ₹7,600 on a weekend. That booking falls in the 18% slab.
Each booking is assessed on the price actually charged for that stay.

            Watch your thresholds at peak season: If your base rate is ₹7,200 but you charge ₹7,800 during Diwali, those Diwali bookings jump to 18%. Price your packages carefully around the ₹7,500 line.
          

Specified premises status: A hotel where the value of supply of any unit of accommodation exceeded ₹7,500 per unit per day in the preceding financial year is classed as a "specified premises." This status governs restaurant and F&B GST rates only. It does not change how individual room bookings are taxed. See the F&B section below.

GST Rate on Lodges, Resorts and Guest Houses

There is no separate GST category for lodges, dharamshalas, guest houses or resorts. They all follow the same two-slab rule. The property type does not change the rate. The price charged per room per night determines the slab.

Property type	Room price up to ₹7,500	Room price above ₹7,500
Budget hotel	5%	18%
Lodge / guest house	5%	18%
Dharamshala / hostel	5%	18%
Homestay	5%	18%
Resort	5%	18%
Business hotel	5%	18%

A lodge in Rishikesh at ₹1,500 per night: 5% GST. A resort in Goa at ₹12,000 per night: 18% GST.

CGST, SGST and IGST: Which Applies to Your Hotel?

Hotel accommodation always attracts CGST and SGST, not IGST. This is because the place of supply for accommodation is the location of the hotel, under Section 12(3) of the IGST Act.

Delhi guest, Goa hotel: CGST + Goa SGST. Not IGST.
Mumbai company, Mumbai hotel: CGST + Maharashtra SGST.
UK tourist, Jaipur hotel: CGST + Rajasthan SGST.

            The rule is simple: Whatever state your hotel is in, that state's SGST applies. The guest's home state does not matter. You never charge IGST on room accommodation.
          

For ITC claims, invoice requirements and GSTR filing, see our hotel GST rules guide.

GST on Food & Beverages and Room Service

The GST on your restaurant, room service and banquet depends on whether your hotel is classified as "specified premises."

Your hotel is a specified premises if the value of supply of any unit of accommodation exceeded ₹7,500 per unit per day in the preceding financial year, or if you opt in voluntarily. This test sets your F&B GST rate for the full financial year.

Service	Non-specified premises (all rooms ₹7,500 or below)	Specified premises (value exceeded ₹7,500/night in previous FY)
Restaurant / dining room	5% (no ITC)	18% (ITC available)
Room service / in-room dining	5% (no ITC)	18% (ITC available)
Banquet / outdoor catering	5% (no ITC)	18% (ITC available)

A mid-scale hotel in Pune whose best suite is ₹8,000 per night will be classified as a specified premises for the following financial year. All its F&B must charge 18% GST from that point, but it can claim ITC on ingredients and supplies.

            Practical tip for meal-plan packages: If you sell a MAP or AP package (breakfast and dinner included), the whole package is taxed as a composite supply. The accommodation rate determines the GST for the bundle. If the package price is above ₹7,500 per night, the whole amount attracts 18%.
          

Worked Examples: Calculating GST on a Hotel Bill

Example 1: Budget hotel in Varanasi (₹3,200 per night, 2 nights)

Room price per night: ₹3,200 (falls in 5% slab)

Total room cost: ₹3,200 x 2 = ₹6,400

GST at 5%: ₹6,400 x 5% = ₹320

Breakdown: CGST ₹160 + SGST ₹160

Total bill: ₹6,720

Example 2: Business hotel in Bengaluru (₹8,500 per night, 1 night)

Room price: ₹8,500 (falls in 18% slab)

GST at 18%: ₹8,500 x 18% = ₹1,530

Breakdown: CGST ₹765 + SGST ₹765

Total bill: ₹10,030

Example 3: Hotel with both room types (Mumbai)

Standard room: ₹7,200/night. Deluxe room: ₹9,500/night.

Standard room GST: ₹7,200 x 5% = ₹360 (no ITC)

Deluxe room GST: ₹9,500 x 18% = ₹1,710 (ITC available)

ITC on shared hotel expenses must be split proportionately under Rule 42.

Old GST Slabs That No Longer Apply

If you are reading an older source, these slabs no longer apply:

0% for rooms below ₹1,000: This exemption was withdrawn on 18 July 2022. All hotel accommodation is now taxable.
12% for rooms between ₹1,001 and ₹7,500: This slab was abolished from 22 September 2025. The rate is now 5% for this range.
18% with ITC above ₹7,500: This remains, but the "declared tariff" basis was replaced by "actual price charged" from 1 April 2025.

            Check your software: A PMS or accounting package set up before September 2025 may still apply 12% on rooms in the ₹1,001–₹7,500 range. Verify your GST settings and correct any mis-filed returns with your accountant.
          

For ITC, invoices and filing see our hotel GST rules guide. For OTA payouts see the TDS & TCS guide.

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Frequently Asked Questions

What is the GST rate on hotel rooms in India?

Since 22 September 2025, hotel rooms in India have two GST slabs: 5% (no ITC) up to ₹7,500 per night and 18% (ITC allowed) above ₹7,500. The slab is based on the actual price charged to the guest.

What GST rate applies to lodges and guest houses?

Lodges, guest houses, dharamshalas and homestays follow the same rules as hotels. If the room price is ₹7,500 or below per night, the rate is 5% with no ITC. If the price is above ₹7,500, the rate is 18% with ITC. There is no separate rate for these property types.

Is the GST rate based on the declared tariff or the discounted rate?

Since 1 April 2025 (Notification 05/2025-Central Tax Rate), the 'declared tariff' concept was removed. The slab is now based on the actual price charged: the value of supply. A room with a rack rate of ₹9,000 discounted to ₹7,000 falls in the 5% slab because the guest paid ₹7,000.

Can a hotel charge IGST instead of CGST and SGST?

No. Hotel accommodation is always taxed where the hotel is located. The place of supply for accommodation services is the location of the property, regardless of where the guest lives or where their company is registered. This means the tax is always CGST plus SGST, never IGST. There is one exception: if a hotel is supplying services to an overseas company as an export of service, an accountant can advise on that specific case.

What is the GST rate on room service and restaurant bills in a hotel?

It depends on whether the hotel is a specified premises. A hotel where the value of supply of any unit of accommodation exceeded ₹7,500 per unit per day in the preceding financial year must charge 18% GST on food and beverages. Otherwise the rate is 5% without ITC. Room service follows the restaurant rate.

How do I calculate GST on a hotel bill with a ₹6,500 room?

A ₹6,500 room falls in the 5% slab. GST = ₹6,500 x 5% = ₹325. Split equally: CGST = ₹162.50 and SGST = ₹162.50. Total bill = ₹6,825.

What were the old GST slabs for hotels before September 2025?

Before 22 September 2025, hotels had three slabs: 0% below ₹1,000 (withdrawn July 2022), 12% from ₹1,001 to ₹7,500, and 18% above ₹7,500. The 56th GST Council, effective 22 September 2025, replaced the 12% slab with 5% (no ITC) and kept 18% with ITC above ₹7,500.

What is the GST rate for hotels in India below ₹1,000?

There is no 0% slab any more. The exemption for rooms under ₹1,000 was withdrawn in July 2022. All hotel accommodation is now taxable: 5% up to ₹7,500 per night, 18% above.