GST on hotel rooms

Hotel GST follows the room tariff per night, not the hotel's star rating. The same chain can bill you 5% or 18% depending on what the room actually costs on the night you stay.

These bands apply from 22 September 2025. Older articles still quote a 0% band under ₹1,000, 12% up to ₹7,500, or 28%/40% for luxury rooms — none of those apply any more.

Why the tariff, not the hotel, decides

This is the part that surprises people. A five-star property selling a room at ₹6,000 on a slow midweek night is in the 5% band for that booking. The same room at ₹9,000 during a festival weekend is in the 18% band. Nothing about the hotel changed — only the price did.

It also means a booking site showing two similar hotels at similar prices can produce noticeably different totals at checkout if one sits just either side of a threshold.

The threshold effect is worth understanding

Because the rate jumps rather than slides, a small change in tariff can produce a disproportionate change in what you pay.

Look at the last two rows. The room costs ₹500 more, but the bill goes up by ₹1,565 — because crossing the threshold moves the whole tariff into the higher slab, not just the amount above it. This is not a marginal-rate system.

If you are booking near a boundary, it is genuinely worth checking whether a slightly cheaper room lands you in the lower band.

Calculate at 5% →   Calculate at 18% →

Per room, per night

The assessment is on each room individually. Booking two rooms at ₹5,000 each does not add up to ₹10,000 and push you over the ₹7,500 line — each room is judged on its own ₹5,000 nightly rate and taxed at 5%.

Likewise a seven-night stay is seven separate nightly assessments, not one large one. If the tariff varies across the week — cheaper on weekdays, dearer at the weekend — different nights of the same booking can genuinely sit in different slabs on the same folio.

Reading a hotel folio

A hotel bill usually contains more than the room. Meals, laundry, spa treatments and minibar items are separate supplies with their own rates, which is why the tax section often has several lines rather than one.

The most common confusion: the hotel restaurant. A meal charged to your room is taxed as a restaurant supply, not at the room's rate. In a hotel that charges more than ₹7,500 a night for its rooms, the restaurant is generally at 18%; elsewhere it is generally 5%. So a ₹6,000 discounted room billed at 5% next to an 18% dinner line is normal, not an error.

As with any bill, a stay within your own state shows CGST + SGST at half each; a hotel in another state still shows CGST + SGST rather than IGST, because the supply happens where the property is.

Frequently asked

Is GST charged on the discounted rate or the rack rate?

On the amount actually charged. If a hotel advertises ₹9,000 but sells you the room at ₹7,000, the tax should follow the ₹7,000 you paid — which in that example also moves the booking into a lower slab. A bill applying the higher slab to a discounted room is worth querying.

Do homestays and guesthouses work the same way?

The tariff bands apply to accommodation generally, so a budget guesthouse is in the 5% band like any other room up to ₹7,500 a night — the old exemption for rooms under ₹1,000 ended in July 2022. Very small operators may be below the registration threshold and not charging GST at all, which is why some homestay bills show no tax line.

Can a business claim GST on hotel stays?

Accommodation for business travel is generally claimable where the invoice carries the business GSTIN and the stay is genuinely for business. In practice this needs to be arranged at check-in — a folio issued in an employee's personal name is difficult to fix afterwards. Food billed to the room is subject to the separate restrictions on food and beverage credit.

Before you rely on this

This page is a plain-language reference, not the official schedule. Accommodation thresholds have been revised several times since GST began, and the bands above reflect the structure in force since 22 September 2025. For invoicing, a claim, or a disputed folio, confirm against the current CBIC notification or ask a qualified tax professional. If a figure here looks wrong, tell us.

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