GST Rate for Hotels in India 2026: 0%, 5% and 18% Slabs with HSN 9963

Understanding GST Rates for Hotels in India

The GST rate for hotel accommodation in India depends on the value of a unit of accommodation per day. With effect from 22 September 2025 (Notification No. 15/2025-Central Tax (Rate), following the 56th GST Council), there are three bands: rooms up to ₹1,000 per night are exempt, rooms from ₹1,001 to ₹7,500 per night attract 5% without input tax credit, and rooms above ₹7,500 per night attract 18% with full input tax credit. The earlier 12% slab for the ₹1,001–₹7,500 band was removed on that date.

This page covers the current rates, the HSN/SAC code for hotel accommodation (9963), the CGST/SGST split, a comparison with the pre-GST regime, and the compliance points hotels and their guests most often get wrong.

GST Rate and HSN/SAC Code for Hotels and Hotel Rooms

Room Tariff (per unit per day)	HSN/SAC Code	GST Rate	Input Tax Credit
Up to ₹1,000	996311	Exempt (0%)	Not available
₹1,001 to ₹7,500	996311	5%	Not available
Above ₹7,500	996311	18%	Available

The rate follows the actual transaction value for the stay, not a published rack rate. Effective 22 September 2025, the 5% rate for accommodation valued at ₹7,500 or less per unit per day is mandatory — hotels cannot opt for 18% with input tax credit on those units.

Detailed Tax Breakdown for Hotels

GST on hotel accommodation is split equally between central GST (CGST) and state GST (SGST) for intra-state stays. For inter-state stays, a single IGST at the same total rate applies:

• Rooms up to ₹1,000 per night: exempt — no CGST, SGST or IGST is charged.
• Rooms from ₹1,001 to ₹7,500 per night: 5% total — CGST 2.5% + SGST 2.5%. No input tax credit.
• Rooms above ₹7,500 per night: 18% total — CGST 9% + SGST 9%. Full input tax credit available.

Two worked examples: a room at ₹6,000 per night attracts GST of ₹300 (5%), taking the bill to ₹6,300. A room at ₹10,000 per night attracts GST of ₹1,800 (18%), taking the bill to ₹11,800.

GST Calculator for Hotel Tariffs

Enter a room tariff to see the GST amount under the current slabs:

Room tariff per night (₹): Calculate GST

function bizplanHotelGst() { var t = parseFloat(document.getElementById('hotelTariff').value || '0'); var rate = 0, label = 'Exempt (0%)'; if (t > 7500) { rate = 0.18; label = '18%'; } else if (t > 1000) { rate = 0.05; label = '5%'; } var gst = t * rate; document.getElementById('hotelGstOut').innerHTML = 'Room tariff: ₹' + t.toFixed(2) + ' — GST rate: ' + label + ' — GST amount: ₹' + gst.toFixed(2) + ' — Total: ₹' + (t + gst).toFixed(2); }

Comparison of GST Rates by Tariff Band

Room Tariff (₹ per night)	GST Rate	GST on a room at the band start (₹)	Input Tax Credit
Up to 1,000	0%	0	No
1,001 – 7,500	5%	50.05 (at ₹1,001)	No
Above 7,500	18%	1,350.18 (at ₹7,501)	Yes

Before 22 September 2025 the middle band was taxed at 12% with input tax credit. The 28% luxury slab was abolished earlier, in 2021, when the basis of taxation moved from declared tariff to the actual transaction value per unit per day.

Comparison with Pre-GST Tax Regime

Prior to the implementation of GST, the tax regime for hotel rooms in India was complex, with multiple taxes levied by the central and state governments. The pre-GST tax regime included taxes such as service tax, luxury tax, and value-added tax (VAT). The effective tax rate for hotel rooms varied from state to state, ranging from 10% to 20%.

The introduction of GST has simplified the tax structure for hotel rooms, with a single tax rate applicable across the country. However, the GST rates for hotel rooms are higher than the pre-GST tax rates in some states, which has led to an increase in room tariffs.

Pre-GST Tax Rates for Hotel Rooms

State	Service Tax (%)	Luxury Tax (%)	VAT (%)	Effective Tax Rate (%)
Maharashtra	14	10	5	19.14
Delhi	14	10	5	19.14
Kerala	14	10	5	19.14

Composition vs Regular Scheme

Under the GST regime, hotel rooms can be taxed under either the composition scheme or the regular scheme. The composition scheme is a simplified tax scheme for small businesses, where the tax rate is lower, but the business is not eligible for input tax credit.

The regular scheme, on the other hand, allows businesses to claim input tax credit, but the tax rate is higher. The following table compares the tax rates under the composition scheme and the regular scheme:

Scheme	HSN/SAC Code	Description	GST Rate
Composition Scheme	9963	Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places	1% / 5%
Regular Scheme	9963	Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places	5% / 18%

It is essential to note that the composition scheme is only available for businesses with an annual turnover of up to ₹1.5 crore. Businesses with an annual turnover above ₹1.5 crore must opt for the regular scheme.

Input Tax Credit and Compliance

Q: Can I claim input tax credit for GST paid on hotel rooms?

A: Yes, you can claim input tax credit for GST paid on hotel rooms, provided you have a valid GST invoice and the rooms are used for business purposes.

Q: What are the compliance requirements for hotel rooms under the GST regime?

A: The compliance requirements for hotel rooms under the GST regime include obtaining a GST registration, filing GST returns, and maintaining accurate records of GST invoices and payments.

Q: What are the common billing mistakes associated with hotel rooms under the GST regime?

A: Common billing mistakes associated with hotel rooms under the GST regime include incorrect GST rates, missing GST invoices, and failure to claim input tax credit.

To avoid these mistakes, it is essential to ensure that your billing process is accurate and compliant with the GST regulations. Our compliance tips section provides more information on how to avoid common billing mistakes.

Frequently Asked Questions and Compliance Tips

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

• Q: Can hoteliers claim input tax credit on GST paid on goods and services used for providing accommodation services?
• A: Yes, hoteliers can claim input tax credit on GST paid on goods and services used for providing accommodation services, subject to certain conditions.
• Q: What are the compliance requirements for hoteliers under GST?
• A: Hoteliers are required to obtain GST registration, file GST returns, and pay GST on time to avoid penalties and interest.

Compliance Tips

To avoid common billing mistakes associated with hotel rooms, follow these compliance tips:

1. Ensure that the GST rate is correctly applied to the room tariff, based on the applicable GST rate slab.
2. Provide a clear breakdown of the GST amount in the invoice or bill, to avoid any confusion or disputes with guests.
3. Maintain accurate and detailed records of GST payments and input tax credits, to ensure compliance with GST regulations.

By following these compliance tips and staying updated with the latest GST regulations, hoteliers can ensure smooth and efficient operations, while also avoiding any potential penalties or fines.