GST on Hotel & Tourism Industry

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Last updated on August 6th, 2022 at 08:00 pm

GST on Hotel & Tourism Industry

Budget Holidays will become expensive by 12% from 18th July 2022. Supplying accommodation in hotels is considered a supply of service and it attracts GST @ 12% or 18% (SAC Code – 9963).

In 2019, Government slashed the GST rates for the highest category of room rents in the hotel industry which gave the tourism/hotelier industry a breathing space. Whereas in 2022, Government has brought the lowest category of room rents under the tax ambit by directly bringing the exempt category to pay a hefty 12% GST.

What is covered in the accommodation in hotels?

Accommodation in hotels will cover hotels, inns, guest houses, clubs, campsites, or other commercial places which are meant for residential or lodging purposes where the tariff for a unit of accommodation is declared per unit per day.

When GST shall not be levied by Hotels?

W.E.F. 18th July 2022, GST shall not be levied for providing accommodation services only in case the hotel is not required to register as the aggregate turnover does not exceed the threshold limit of Rs 20 lakhs.

GST Rates on accommodation in Hotels

18th July 2022 and onwards

The decision to withdraw the exemption provided for the room rents up to Rs 1000 per day was taken at the 47th GST Council Meeting.

 

Room Rent

Rate
Rs 0 to Rs 7500 per day

12% with ITC

Rs 7501 and more

18% with ITC

The exemption was withdrawn vide a CGST(Rate) Notification 04/2022 dated 13th July 2022.

GST Rate notified vide a CGST(Rate) Notification 03/2022 dated 13th July 2022.

 

 1st October 2019 2017 to 17th July 2022

The decision to reduce the category of GST rates based on room rent slabs and rate reduction for the highest room rent slab per day was taken at the 37th GST Council Meeting.

Room Rent

Rate
Rs 0 to Rs 1000 per day

Exempt

Rs 1001 to Rs 7500 per day

12% with ITC
Rs 7501 and more

18% with ITC

GST rates were substituted/notified vide a CGST(Rate) Notification no. 20/2019 dated 30th September 2019.

 

1st July 2017 to 30th September 2019

The decision to notify the GST rates for the hotel and tourism industry was taken at the 14th GST Council Meeting.

Declared Tariff

Rate
Rs 0 to Rs 1000 per day

Exempt

Rs 1001 to Rs 2499 per day

12% with ITC
Rs 2501 to Rs 4999 per day

18% with ITC

Rs 5000 and more

28% with ITC

GST rates were substituted/notified vide a CGST(Rate) Notification no. 11/2017 dated 28th June 2017.

 

Gist of the evolution of GST on Hotels

 

GST on Food in Restaurants, Food in Hotels, Food by parcels, Food by  Catering

Particulars

GST Rate

Standalone Restaurants

5%
Restaurants where the room rent is up to Rs 7500

5% without ITC

Restaurants where the room rent is Rs 7500 or above

18% with ITC
Outdoor catering services

5% without ITC

Catering services where the room rent is up to Rs 7500

5% without ITC
Catering services where the room rent is Rs 7500 or above

18% with ITC



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About CA Ankita Khetan 196 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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