GST Rate for Hotels - Updated 2026 Slab & HSN Details

Understanding GST Rates for Hotels in India

In India, the Goods and Services Tax (GST) has been implemented to simplify the taxation system. For hotels, the GST rate is crucial to understand as it affects the pricing and billing of their services. The GST rate for hotels in India is 18% for rooms with a tariff of ₹7,500 and above per night, 12% for rooms with a tariff between ₹2,500 and ₹7,500 per night, and 5% for rooms with a tariff below ₹2,500 per night.

The HSN/SAC code for hotel services is 9963, and the effective date of the rate is July 1, 2017. The brief description of the goods/services is "Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes."

There are special conditions or exemptions for hotels, such as the exemption of GST for hotels with a tariff below ₹1,000 per night. However, this exemption is subject to certain conditions and may not be applicable in all cases.

Composition vs Regular GST Scheme for Hotels

Hotels in India have the option to choose between the composition scheme and the regular GST scheme. The composition scheme is a simplified tax scheme that allows hotels to pay a fixed percentage of their turnover as tax, without the need to maintain detailed records or file returns. The regular GST scheme, on the other hand, requires hotels to maintain detailed records and file returns, but allows them to claim input tax credit.

The composition scheme is available for hotels with a turnover of up to ₹1.5 crores, and the tax rate is 1% of the turnover. The regular GST scheme, on the other hand, requires hotels to pay GST at the applicable rate, which is 18% for rooms with a tariff of ₹7,500 and above per night, 12% for rooms with a tariff between ₹2,500 and ₹7,500 per night, and 5% for rooms with a tariff below ₹2,500 per night.

Comparison with Pre-GST Tax Regime

Prior to the implementation of GST, hotels in India were subject to multiple taxes, including service tax, luxury tax, and value-added tax. The pre-GST tax regime was complex and often led to double taxation, which increased the cost of hotel services for consumers.

The GST regime has simplified the taxation system for hotels, with a single tax rate applicable across the country. However, the GST rate for hotels is higher than the pre-GST tax rate, which has increased the cost of hotel services for consumers.

Calculator Widget

To calculate the total GST amount for hotel services, you can use the following calculator widget:

Frequently Asked Questions

Here are some frequently asked questions regarding input tax credit and compliance for hotels:

• What is the input tax credit available for hotels? The input tax credit available for hotels is the tax paid on goods and services used in the course of their business, such as food, beverages, and amenities.
• How can hotels claim input tax credit? Hotels can claim input tax credit by filing their returns and providing the necessary documentation, such as invoices and receipts.
• What are the compliance requirements for hotels? The compliance requirements for hotels include filing returns, paying tax, and maintaining records of their transactions.

Compliance Tips

To avoid common billing mistakes and ensure compliance, hotels should:

1. Maintain accurate and detailed records of their transactions, including invoices, receipts, and payment vouchers.
2. File their returns on time and pay the applicable tax.
3. Claim input tax credit only on eligible goods and services.
4. Ensure that their billing system is GST-compliant and generates invoices with the correct GST rate and amount.

By following these compliance tips, hotels can avoid penalties and fines, and ensure that they are in compliance with the GST regulations.