GST on Hotel Room Rent in 2026: Rates, Examples and Invoice Format
Since 22 September 2025, hotel rooms at ₹7,500 or less per night attract 5% GST without input tax credit, and rooms above ₹7,500 attract 18%. Here is how that works night by night, with examples.
Since 22 September 2025, GST on hotel accommodation in India is 5% (without input tax credit) when the value of supply is ₹7,500 or less per unit per day, and 18% (with input tax credit) when it is above ₹7,500. The old 12% slab no longer exists. The rate depends on the actual price charged per room per night, not on a published or “declared” tariff.
Current GST rates for hotel rooms
| Value per room per night | GST rate | Input tax credit |
|---|---|---|
| ₹7,500 or less | 5% (2.5% CGST + 2.5% SGST) | Not available |
| Above ₹7,500 | 18% (9% CGST + 9% SGST) | Available |
The change was recommended by the 56th GST Council meeting on 3 September 2025 and notified by Notification 15/2025-Central Tax (Rate), effective 22 September 2025. Inter-state B2B supplies use IGST at the same total rate.
How the rate is decided: transaction value, not declared tariff
Until July 2018 the slab depended on the room’s declared tariff. Since 27 July 2018 it depends on the actual value of supply per unit per day, so a ₹9,000 rack-rate room sold at ₹6,800 is taxed at 5%. Discounts given before the invoice is raised reduce the value; extra beds and other charges billed as part of the room count towards it.
Worked examples
- Homestay room at ₹3,200 a night for 2 nights: ₹6,400 + 5% GST (₹160 CGST + ₹160 SGST) = ₹6,720.
- Resort cottage at ₹7,500: 5%, because the slab covers ₹7,500 or less.
- Boutique suite at ₹9,500: 18%, so ₹1,710 GST per night.
- A stay that crosses the line: a weekday night at ₹6,900 (5%) and a weekend night at ₹8,200 (18%) are taxed night by night, which is why billing software that applies the slab per night saves errors.
What about the restaurant?
Restaurant service is 5% without ITC, except in “specified premises”, where it is 18% with ITC. Since 1 April 2025 a hotel is specified premises if the actual value of any room exceeded ₹7,500 per night in the previous financial year, or if it opts in by declaration. Ask your CA which applies to you each April.
Do small homestays need GST registration?
Registration is required once aggregate turnover crosses ₹20 lakh a year (₹10 lakh only in Manipur, Mizoram, Nagaland and Tripura). For hosts below the threshold who sell through an OTA, the OTA as e-commerce operator pays GST on those bookings under section 9(5). Above the threshold, you register and charge GST yourself.
What a hotel GST invoice must show
- Your name, address and GSTIN, plus a unique invoice number in a series for the financial year
- Invoice date, and the guest’s name and address (and GSTIN for B2B)
- Description with SAC (accommodation is usually 996311; confirm against the CBIC classification)
- Nights, rate per night, taxable value and rate of tax
- CGST and SGST (or IGST) amounts shown separately, and place of supply
B2B invoices also fall under e-invoicing once your aggregate turnover is above ₹5 crore. Corrections after posting should be made with a credit note, not by editing the invoice.
ITC: what to watch after the change
Because 5% rooms carry no input tax credit, hotels that sell both 5% and 18% rooms must reverse credit proportionately, and a hotel with every room at or below ₹7,500 had to reverse its credit balance from 22 September 2025. This is the part to review with your CA.
FAQs
What is GST on hotel rooms below ₹7,500?
5% without input tax credit, since 22 September 2025.
Is GST charged on declared tariff or actual price?
On the actual value of supply per room per night.
Is breakfast included in room value?
If it is part of a single room package, it is usually treated as one composite supply taxed at the accommodation rate. Confirm package structures with your CA.
Sources: TaxGuru on GST 2.0 for hotels; EY tax alert, September 2025; Taxmann on specified premises; ClearTax on registration limits.
Last checked: 9 October 2026. Rules change; confirm anything that affects your filings with your CA, lawyer or the issuing authority. This guide is general information, not legal or tax advice.
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