GST on Hotel Rooms in India (2026): 5% up to ₹7,500
GST 2.0 cut hotel-room GST to 5% for tariffs up to ₹7,500/night (from 12%, without ITC); rooms above ₹7,500 are 18% with full ITC. Here's the current guide for hotels and guesthouses.
Part of: The Complete GST Guide for Small Business in India (2026)
Hotel GST turns on the room tariff per night. From 22 September 2025, GST 2.0 cut rooms priced up to ₹7,500/night to 5% (from 12%), while rooms above ₹7,500 stay at 18% with full input tax credit. Here's how hotels and guesthouses should bill in 2026.
Quick answer: room tariff ≤ ₹7,500/night = 5% GST (no ITC); tariff > ₹7,500/night = 18% (with ITC).
Hotel GST at a glance
| Room tariff / service | GST rate | ITC |
|---|---|---|
| Room tariff ≤ ₹7,500 per night | 5% | No |
| Room tariff > ₹7,500 per night | 18% | Yes |
| Restaurant inside the hotel (tariff ≤ ₹7,500) | 5% | No |
| Restaurant inside the hotel (tariff > ₹7,500) | 18% | Yes |
| Banquet / event hall | 18% | Yes |
What changed under GST 2.0
Rooms up to ₹7,500 dropped from 12% to 5% — cheaper mid-range stays. The ₹7,500 line also decides the in-house restaurant's rate (5% vs 18%) and whether the hotel can claim ITC. The tariff test is on the declared/transaction tariff per night.
FAQs
Is the ₹7,500 line per room per night?
Yes, it is assessed per unit of accommodation per night. Confirm the exact declared-vs-transaction-value basis for your property with your CA.
General information only, not tax advice; thresholds and rates can change. Confirm the current treatment for your property on CBIC notifications or with your CA. Last reviewed: September 2026.
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