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Decision To omit the definition of declared tariff and suitably amend the definition of specified premises (from the services rate and exemption notifications) to link it with actual value of supply of any unit of accommodation provided by the hotel and to make the rate of GST applicable on restaur
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From April 1, 2025, the GST rate for restaurant services in hotels will depend on the 'value of supply' of accommodation units in the preceding financial year. If the value exceeded £7,500 for any unit, the restaurant GST will be 18% with ITC; otherwise, it will be 5% without ITC.
The GST rate for restaurant services in hotels will be determined by the 'value of supply' of accommodation units made in the previous financial year. A value exceeding £7,500 for any unit triggers the 18% rate with ITC.
Yes, hotels have an option to pay GST on restaurant services at the rate of 18% with ITC, provided they declare this choice at the beginning of the financial year or upon obtaining registration.
Previously, the GST rate for hotel restaurants was based on whether any room was sold above £7,500 in the current financial year. This created uncertainty, as hotels couldn't know the applicable rate at the start of the year, and it was difficult to recover differential tax if the threshold was crossed.
These changes are set to be effective from April 1, 2025, to ensure smoother transitions and provide clarity.
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