Poojitha Raam Vinay
Quick Summary
From April 1, 2025 restaurants inside hotels will have to charge 18% GST from customers instead of 5% previously if the said restaurant satisfied the definition of 'specified premises'. However, restaurants who do not satisfy this definition of specified premises have an option to either charge
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FAQ :
The new GST rate comes into effect from April 1, 2025.
Hotels where any room was charged above ₹7,500 per night in the previous financial year are classified as 'specified premises' and their restaurants must charge 18% GST.
Restaurants in hotels where no room exceeded ₹7,500 per night can choose to charge 5% GST without Input Tax Credit (ITC), or opt for 18% GST with ITC.
Yes, restaurants within 'specified premises' are eligible to claim ITC. Hotels not under 'specified premises' can also claim ITC if they opt for the 18% GST rate.
Diners at restaurants within 'specified premises' will face a higher GST rate of 18%, potentially increasing their food bills. The actual impact may vary based on restaurant pricing strategies.
Once a hotel becomes classified as 'specified premises', it remains so until it opts out. Reclassification is not needed yearly.
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