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Hotel accommodation services.

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CA NAMRATA KAYARWAR

316 Points Posted on 20 January 2025

1. Hotel having restaurant business too. pays 5% tax in cash in restaurant and room tariff is less than 7.5k. now started charging 7500/- per room per day after renovation.

As per recent notification 5/2025 and 8/2025 whether he can continue with the same and requires to file any declaration?

2.Hotel having tariff less than 7.5k doesn't own restaurant whether requires to file any declaration??

Replies (5)

Quick Summary

This discussion clarifies GST implications for hotels following renovations that increased room tariffs above ₹7,500. It explains that if a hotel's room tariff now exceeds ₹7,500, restaurant services are taxed at 18% with Input Tax Credit (ITC), requiring a specific declaration. For hotels with tariffs below ₹7,500, no declaration is needed for restaurant services, and the 5% rate without ITC generally applies.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 21 January 2025

Impact of Renovation on Tax Rates Since the hotel's room tariff has increased to ₹7,500 per day after renovation, the tax rate on restaurant services will change.

As per the notifications, the GST rate on restaurant services in hotels will be dependent on the actual value of supply of accommodation in the preceding financial year.

New Tax Rates for Restaurant Services If the hotel's room tariff exceeds ₹7,500 in the preceding financial year, the GST rate on restaurant services will be 18% with Input Tax Credit (ITC).

Otherwise, the rate will be 5% without ITC¹[3). Declaration Requirements For the hotel with a restaurant, if they want to pay tax at 18% with ITC, they need to file a declaration to that effect on or before the beginning of the financial year or at the time of registration.²

For the hotel without a restaurant and a tariff less than ₹7,500, no declaration