GST Rate for Hotel Industry

Shobhit Gupta , Last updated: 06 July 2017
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Hotel and Restaurants Services

Introduction: The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. With the increase in tourism hospitality industry has the vital role to attract the foreign tourist. With the implementation of GST, it is important to know the provisions that will affect the hotel industry.

Services provided by Hotel Industry:

Room accommodation services.
Serving of foods and liquor in restaurant and in room.
Rent a cab.
Mandap keeper.
Banking and financial services like foreign currency exchange.
Supply of packed food items as mini bar.
Renting out the premises for events, conferences etc.
Catering.
Laundry services.
Business support services.
Telecommunication services like telephone, fax, wifi.
Beauty parlour
Gymnasium services.
Club Facility.

Now it is important to know the tax rates:

ROOM ACCOMODATION SERVICES

S. No.

Services

Rate of Tax under GST

Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation less than one thousand rupees per day or equivalent

Exempted Services.

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having room tariff Rs.1000 and above but less than Rs.2500 per room per day.

12% with ITC Credit.

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff of Rs 2500/ and above but less than Rs 7500/- per room per day.

18% with ITC Credit.

Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is Rs 7500/- and above per night per room.

28% with ITC Credit.

SERVING OF FOODS AND LIQUOR IN RESTRURANTS AND IN ROOM DINING

S. No.

Services

Rate of Tax under GST

Supply of Food/drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having licence to serve liquor.

12% with ITC Credit.

Supply of Food/drinks in restaurant having licence to serve liquor.

18% with ITC Credit.

Supply of Food/drinks in restaurant having facility of air-conditioning or central heating at any time during the year.

18% with ITC Credit.

Supply of Food in catering service

18% with ITC Credit.

Supply of Food/drinks in air-conditioned restaurant in 5-star or above rated Hotel

18% with ITC Credit.

Point to be Noted:

Serving of Alcoholic drinks will be outside the preview of GST and local sales tax or VAT shall be applied on the same.
It is advisable for the hotel to issue the separate bills for alcoholic drinks and foods.

RENT A CAB

Rent a cab (If fuel cost is borne by the service provider)

5% with No ITC.

ITC shall be available if cab is booked from other cab operator.

Rent a cab (If fuel cost is borne by the service recipient)

18% with ITC Credit.

MANDAP KEEPER

Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises.

18% with ITC Credit.

FORIEGN CURRENCY EXCHANGE SERVICES

In case of currency exchange to its guest

18% with ITC Credit, but valuation shall be done as per valuation rules

Value of Currency Involved (in INR)
0 to 1,00,000/-	1% or Rs. 250/- whichever is higher.
1,00,001/- to 10,00,000/-	1,000/-+ 0.5%
10,00,00/- and above	5,000/-+0.10% or Rs. 60,000/- whichever is lower.