Input Tax Credit Treatment For Hotel Service Provider.

This query is : Resolved

Quick Summary

From 22nd September, hotel accommodation services with tariffs below £7,500 are subject to a 5% GST rate and cannot claim Input Tax Credit (ITC). This means any ITC claimed in GSTR-3B for these specific services must be adjusted to zero. The tax liability for these supplies should then be settled using cash payments.

Sudipta Das

Sudipta Das (Querist)
Follow

20 November 2025 From 22nd Sept onward rate of hotel below 7500 has become 5% without claiming ITC. Now in IMS the invoices for Input goods & Services are accepted. Should the ITC claimed in 3B manually be changed to zero. Or I can keep the same in ITC ledger and pay the Tax Liability in cash.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

21 November 2025 From 22nd September 2025, hotel accommodation services with tariffs up to ₹7,500 per day are compulsorily taxed at 5% GST without ITC. Therefore, you must not claim ITC in GSTR‑3B for such supplies. Any ITC reflected in the ledger for inputs/services used exclusively for these rooms must be reversed to zero, and the tax liability should be discharged in cash.

For rooms under ₹7,500, ITC is blocked under Section 17(5) read with the notification.
Yes, ITC claimed in 3B must be changed to zero for rooms ≤ ₹7,500.

Message likes : 1 times

Sudipta Das

Sudipta Das (Querist)
Follow

21 November 2025 Thankyou so much Sir.

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

21 November 2025 You are welcome.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now