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GST on Hotel Rooms in India: Rates and Rules
GST on hotel rooms in India depends on the amount charged per room per night, not simply on the hotel category. The current slabs are 5% up to ₹7,500 and 18% above ₹7,500, with different input tax credit rules for each. The old exemption for rooms at ₹1,000 or less was withdrawn in July 2022.
We analyzed 44 YouTube comments about GST on hotel rooms and found that 36% mentioned input tax credit eligibility for room rent and ancillary services.
That tax line can affect a traveller's final bill and a company's expense claim. Here’s how to read it, check the maths and understand what hotels need to record.
How hotel room tariffs determine the GST rate
The GST slab is based on the actual room charge per room per night. A published rack rate alone doesn’t set the slab if the guest receives a discount and pays a different amount.
For accommodation, the current rate bands are:
- Up to ₹7,500: 5% GST, without input tax credit on the accommodation supply.
- Above ₹7,500: 18% GST, with input tax credit available subject to the usual conditions.
Hotels and guests should also check the applicable notifications when a rate or billing rule changes.
A room charged at the top of the lower tariff band falls in that band, with GST added to the room charge. A room charged above the threshold falls in the higher band, with GST added accordingly.
A discounted room can fall into a lower slab. If a room with a higher listed rate is discounted and the amount charged for the night falls within a lower band, the room is taxed at that band’s rate. The invoice should show the charge and discount clearly.
This matters when comparing room costs. For instance, Hotel Shiny Grand’s room rates under ₹3,000 are quoted before applicable taxes, so the GST line is added to the room charge.
Older references may use a declared tariff or an earlier rate structure. Don’t apply those rules automatically. The amount actually charged and the current rate category are the key checks.
Input tax credit: room stays and hotel expenses
Input tax credit, or ITC, lets a GST-registered business offset eligible GST paid on business purchases against its GST liability. Hotel accommodation has a specific limit: the 5% room rate up to ₹7,500 per night does not carry ITC for the room supply.
That restriction applies even when an employee stays for work and the company name appears on the bill. A GST invoice is still useful for the expense record, but it doesn’t turn a 5% room charge into an ITC claim.
For accommodation taxed at 18%, a registered business may be able to claim ITC, provided the expense meets GST rules and the business holds the required invoice. The guest should check the supplier’s GST details and ensure the bill records the correct recipient information. A personal stay or an expense that fails the GST conditions shouldn’t be treated as an eligible business credit.
Hotels face a related issue on their own costs. Where a hotel supplies rooms at 5% without ITC, credit on inputs linked to that supply is restricted. For example, a hotel can’t assume that GST paid on linen, cleaning supplies or other operating costs is fully creditable just because it is GST-registered. Costs linked to different types of supply may need to be separated and allocated under the applicable rules.
Hotel Shiny Grand provides GST invoices for corporate stays. A business traveller can ask for the invoice in the company’s name and then have its accounts team check the room slab before deciding whether any ITC is available.
For a work trip, keep the invoice with the travel approval or expense record. It helps the accounts team distinguish the room amount from GST and other billed services. A booking receipt alone may not contain the invoice details needed for the company’s tax records.
Hotel bill examples, discounts and extra services
Start with the room charge, identify the slab, then calculate GST on that amount. Keep other services separate when they have their own charges. That makes the bill easier to check and avoids treating every line as room rent.
A room-bill example
- Room at ₹2,000: 5% GST is ₹100. The room total is ₹2,100.
- Room at ₹9,000: 18% GST is ₹1,620. The room total is ₹10,620.
These examples cover the room charge only. If a guest orders a meal, laundry or another service, the hotel should show that charge separately and apply the tax treatment for that service. Don’t assume that the room’s rate applies to every item on the bill.
At Hotel Shiny Grand, direct room rates are shown before taxes. The in-house chef-led kitchen and restaurant also has separately priced food and in-room dining. Guests can check the current restaurant menu and compare its charges with the food lines on their bill.
Discounts, upgrades and cancellations
If a discount is applied before the stay and reduces the amount charged for the room, the reduced amount is generally the one to check against the tariff bands. The invoice should make the discount and final room value clear. A room discounted below a slab threshold may therefore attract a different rate than its original listed price.
An upgrade can change the rate if it changes the amount charged per room per night. Ask for the revised room value to appear on the invoice, rather than assuming the original booking rate still applies.
Post-supply discounts have separate GST conditions. A later payment adjustment or rebate doesn’t automatically change the tax value already invoiced. The hotel should check that the discount meets the relevant conditions before changing a tax invoice or issuing a credit note.
Cancellation charges should also be shown clearly. The tax treatment can depend on what the charge represents and how the original booking was billed. If a cancellation fee appears, ask the hotel to explain the taxable amount and the rate used instead of assuming it matches every room booking.
For a stay where arrival or departure timing may change, check the hotel room cancellation policy and booking terms before confirming. That can help you understand the booking terms separately from the tax calculation.
Hotel GST registration, returns and records
A hotel’s GST registration duty depends on its aggregate turnover and the rules that apply to its business. For service providers, the general registration threshold is ₹20 lakh in aggregate turnover, though exceptions and state-specific rules can affect the result. A hotel should confirm its position with a qualified tax professional rather than relying on room revenue alone.
Once registered, a hotel needs to report supplies and pay tax through the GST system. Return frequency depends on the filing scheme and eligibility. Businesses can refer to online registration and return-filing services and should follow the filing period assigned to them.
Good records make each return easier to support. A hotel should retain its tax invoices, credit notes, booking and payment records, discount details, rate calculations and supporting purchase invoices. It should also keep a clear trail for changes, such as a guest changing rooms or a charge being adjusted after checkout.
Room revenue and other services need careful classification. If a guest’s bill includes accommodation, food or laundry, the hotel should preserve the separate line items and apply the correct treatment to each. This is also useful when a business guest asks for an invoice in the company’s name.
Hotels that make supplies with different ITC rules need to review how input credits relate to those supplies. Costs used for more than one type of service may need allocation under the applicable GST rules. A simple system that links invoices to the right service can reduce errors when accounts are reconciled.
Before closing a tax period, the accounts team can check that billed room values match booking records, discounts appear on the invoice, and tax collected agrees with the return. It should also reconcile credit notes and payments. If a filing is late or tax is underpaid, interest or other consequences may apply; the amount depends on the facts and current law.
Booking intermediaries, foreign guests and state tax components
A booking intermediary may collect payment or pass booking details to the hotel, but the room’s GST slab still depends on the taxable room value and the applicable rate. Check the final hotel invoice to see which business supplied the stay, what amount was charged and how GST was split or shown.
If a booking includes a discount, confirm that the hotel bill reflects the final room charge. A payment summary from an intermediary may not show the same detail as a tax invoice. For a corporate claim, the accounts team should use the valid invoice and verify that its GST details match the company’s records.
Foreign guests follow the same room-rate slabs as other guests. Their nationality doesn’t create a separate GST rate for an Indian hotel stay. A hotel bill should still identify the room charge and applicable GST in the usual way.
Don’t assume a foreign guest can claim back GST paid on a hotel room. A tourist refund process, where available for eligible purchases, should not be treated as an automatic refund of accommodation tax. Check current official rules before promising or budgeting for any refund.
GST is a national tax, but an invoice can show different components based on where the supply is treated as taking place. For an intra-state hotel supply, GST is generally split into Central GST and the relevant State GST. For an inter-state supply, Integrated GST generally applies. The hotel’s tax invoice should show the applicable components.
For a stay in Guwahati, check that the invoice reflects the hotel supply and the correct state tax components. If the bill combines room and other services, ask for separate line items so your own records show what was charged and taxed.
Frequently asked questions
What is the GST rate on a hotel room in India?
The room GST rate is 5% up to ₹7,500 per night and 18% above ₹7,500. Rooms at ₹1,000 or less are no longer exempt. The amount charged per room per night determines the slab. Check the final invoice, especially if a discount or upgrade changed the room price.
Can a company claim ITC on hotel room GST?
A company generally can’t claim ITC on accommodation billed at 5% under the slab up to ₹7,500 per night. For a room taxed at 18%, ITC may be available if the company is registered, the expense meets GST conditions and it holds a valid invoice. The accounts team should confirm eligibility before claiming credit.
Does a hotel discount change the GST rate?
Yes, a discount reflected in the room value charged can affect which tariff slab applies. The invoice should show the discount and final taxable value clearly.
Do foreign tourists pay GST on hotel rooms?
Yes, foreign guests pay GST based on the same room-rate slabs as other guests. Their nationality doesn’t create a separate accommodation rate. Don’t assume that a tourist refund process covers hotel GST; check current rules for the specific purchase before expecting a refund.
How can I check GST on a hotel bill?
Check the room amount per night first, then match it to the applicable slab. Make sure the invoice shows any discount and lists extra services separately. For a work stay, verify the company details and GST information before sending the bill to accounts.
Conclusion
Check the final room charge, apply the matching GST slab, and keep the invoice with your travel or business records. If you’re planning a Guwahati stay, review room rates and booking details on Hotel Shiny Grand’s direct booking page before you confirm.
Official references: Central Board of Indirect Taxes and Customs and the GST portal. Confirm current rates there or with your tax adviser before you book.