Input Tax Credit Treatment For Hotel Service Provider.

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This query is : Resolved

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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)
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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)
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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.

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Sudipta Das

Sudipta Das (Querist)
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21 November 2025 Thankyou so much Sir.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 November 2025 You are welcome.

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