GST on Hotel Rooms in India 2026: Rates, SAC & ITC Rules
AuthorMehul Jagwani
Reviewed ByMadhav Bhayani
Summary:
GST on hotel rooms in India is 5% without Input Tax Credit when the accommodation value is up to ₹7,500 per unit per day. If the value exceeds ₹7,500, GST is 18% with ITC, subject to applicable conditions. The 5% rate for rooms up to ₹7,500 has applied since 22 September 2025.
The actual hotel room rate per day will determine the GST to be paid. Accommodation valued up to ₹7500 per day is subject to 5% GST without ITC. If the value is above ₹7500, then 18% GST with ITC will apply. Correct application of these rates to room bookings, discounts and packages is the hotel owner’s responsibility.
GST on Hotel Rooms at a Glance
The following is a table that you can refer to for a clear understanding of hotel rates and applicable GST rate:
| Room value per unit per day | GST rate | ITC for hotel |
| ₹1000 or less | 5% | Not available |
| Up to ₹7,500 | 5% | Not available |
| More than ₹7,500 | 18% | Available, subject to conditions |
For an intra state supply:
- 5% GST becomes 2.5% CGST and 2.5% SGST
- 18% GST becomes 9% CGST and 9% SGST
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How Is the ₹7,500 Hotel GST Threshold Calculated?
This limit is applicable on the total price of each accommodation unit per day. A unit is defined as a room, suite, cottage, villa, tent or any other separately supplied space.
The hotel is generally to take the actual taxable value as a result of an eligible discount, rather than the published tariff.
GST is calculated on the taxable value of the accommodation after an eligible discount. A discount given before or at the time of supply can be excluded from the taxable value when it is duly recorded on the invoice.
Example: Discounted Room Booking
| Particulars | Amount |
| Published room rate | ₹8,000 |
| Invoice discount | ₹1,000 |
| Taxable room value | ₹7,000 |
| Applicable GST | 5% |
| GST amount | ₹350 |
| Total bill | ₹7,350 |
The discount should be recorded on the invoice.
Example: Booking for Multiple Nights
A hotel charges ₹21,000 for one room for three nights.
Daily room value = ₹21,000 ÷ 3 = ₹7,000
Since the daily value does not exceed ₹7,500, the booking attracts 5% GST.
Even for group bookings, the hotel should calculate the value per room per day.
These calculations assume that room rent is the only taxable service on the invoice.
How to Calculate GST on Hotel Accommodation
The formula is:
GST = Taxable room value × Applicable GST rate
Final amount = Taxable room value + GST
Calculation Examples
| Daily room value | GST rate | GST amount | Total payable |
| ₹900 | 5% | ₹45 | ₹945 |
| ₹4,000 | 5% | ₹200 | ₹4,200 |
| ₹7,500 | 5% | ₹375 | ₹7,875 |
| ₹8,000 | 18% | ₹1,440 | ₹9,440 |
| ₹12,000 | 18% | ₹2,160 | ₹14,160 |
SAC Code for Hotel Accommodation
SAC stands for Services Accounting Code. Hotels use SAC codes to classify services on GST invoices and returns.
| Accommodation service | SAC code |
| Hotel, inn, guest house, club or similar room accommodation | 996311 |
| Camp site services | 996312 |
| Recreational and vacation camp services | 996313 |
| Other accommodation services | 996329 |
Before raising an invoice, hotels are encouraged to check HSN and SAC codes for basic rules.
GST Rate for Hotel Restaurants
GST is charged at 5% for restaurant services with no facility to claim ITC. On the other hand, restaurant service provided in specified hotel premises attracts 18% GST with ITC.
| Restaurant category | GST rate | ITC |
| Standalone restaurant | 5% | Not available |
| Restaurant at premises that are not specified premises | 5% | Not available |
| Restaurant at specified premises | 18% | Available, subject to conditions |
A restaurant’s air conditioning does not decide its GST rate.
The detailed rules for GST on restaurant food can help hotels classify food and accommodation separately.
What Are Specified Premises Under GST?
The GST treatment of restaurant services under “specified premises” is linked to the value of room supplied by the hotel.
From 1st April 2025, hotel premises may qualify as specified premises if the value of supply of any room was more than ₹7500 per day in the previous financial year.
The 56th GST council further recommended that a standalone restaurant cannot declare itself as specified premises merely to opt for the 18% GST rate with ITC.
| Restaurant service | GST rate | ITC availability |
| Standalone restaurant | 5% | Not available |
| Restaurant located in hotel premises that do not qualify as specified premises | 5% | Not available |
| Restaurant service provided at specified premises | 18% | Available, subject to conditions |
Can Hotels Claim Input Tax Credit?
ITC depends on the GST rate charged on the accommodation.
| Hotel accommodation | ITC treatment |
| Taxed at 5% | ITC not available |
| Taxed at 18% | ITC available, subject to GST conditions |
| Both 5% and 18% supplies | Common ITC may require proportionate reversal |
A hotel cannot claim ITC on purchases used for supplying rooms taxed at 5%. We encourage you to review the general Input Tax Credit rules before claiming credit.
Frequently Asked Questions
What is the GST rate on hotel rooms in 2026?
If the room rate is valued up to ₹7,500 per unit per day, it attracts 5% GST without ITC. Accommodation above ₹7,500 attracts 18% GST with ITC.
What is the GST rate on a room costing exactly ₹7,500?
A room valued at exactly ₹7,500 per day attracts 5% GST without ITC.
Is GST calculated before or after a hotel discount?
GST is generally calculated on the taxable value after an eligible discount.
Does an AC restaurant charge 18% GST?
No. Having air conditioning installed at premises does not make the GST rate 18%. A normal AC restaurant generally charges 5% without ITC, unless other premises conditions are satisfied.
What is the Domino’s GST rate?
Domino’s GST rate is 5%, applicable on takeaway as well as dine-in.
What is the Barbeque Nation GST rate?
Barbeque Nation GST rate is generally 5% for regular restaurant service.
What is the Wow Momo GST rate?
The Wow Momo GST rate is generally 5% for regular restaurant service.
Disclaimer: "This blog post is for informational purposes only. For specific tax advice related to your business, please consult a qualified Chartered Accountant or GST practitioner."
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