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GST on Hotel Rooms: 5% or 18%
From 22 September 2025, hotel rooms with a tariff up to ₹7,500 per night attract 5% GST without input tax credit, and rooms above ₹7,500 attract 18% with input tax credit. The earlier 12% slab for mid-range rooms no longer applies.
Applicable GST Rate
Hotel accommodation (5% without ITC up to ₹7,500 per night, 18% above)
Hotel Rooms GST rate chart
| Item or service | HSN / SAC | GST |
|---|---|---|
| Room tariff up to ₹7,500 per unit per day | SAC 9963 | 5% (no ITC) |
| Room tariff above ₹7,500 per unit per day | SAC 9963 | 18% (with ITC) |
| Restaurant in a "specified premises" hotel | SAC 9963 | 18% (with ITC) |
| Restaurant in other hotels and standalone restaurants | SAC 9963 | 5% (no ITC) |
How the ₹7,500 limit works
The test is the value charged per room (unit) per day. Extra bed charges count towards it, so a ₹7,000 room with a ₹1,000 extra bed is above ₹7,500 and taxed at 18%.
Rooms below ₹1,000 a night are also taxable. Their exemption was withdrawn in July 2022, so they now fall in the 5% bracket.
Hotel GST calculation examples
A room at ₹6,000 per night: GST at 5% = ₹300, so the guest pays ₹6,300 (₹150 CGST + ₹150 SGST).
A room at ₹9,000 per night: GST at 18% = ₹1,620, so the guest pays ₹10,620 (₹810 CGST + ₹810 SGST).
What "without ITC" means for hotels and business travellers
A hotel charging 5% cannot claim input tax credit on the inputs and services used for those rooms. Hotels with rooms on both sides of ₹7,500 must split their credits proportionately.
A business traveller can claim ITC only on an 18% hotel bill issued to the company's GSTIN. The 5% rate comes without ITC, so there is no credit to claim on cheaper rooms.
GST on restaurants inside hotels
Restaurant service in a hotel that is a "specified premises" (broadly, a hotel that charged more than ₹7,500 for any room in the previous year, or one that opts in) is taxed at 18% with ITC. Other restaurants are taxed at 5% without ITC.