Inflationary and Market Forces Not Valid Defence for Non-Passing of GST Rate Reduction Benefits on Hotel Services

Last updated: 30 December 2025

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The GST Appellate Tribunal has ruled that hotels cannot use inflationary pricing due to COVID-19 or general market forces as a defence for not passing on GST rate reductions to consumers. In this case, Hotel Babylon Inn Pvt. Ltd. was found to have profiteered by not reducing prices after a GST rate cut on accommodation services. The Tribunal ordered the hotel to pay the profiteered amount, plus 18% interest, to the Consumer Welfare Fund.

Court :
GSTAT Delhi

Brief :
NAPA/35/PB/2025, order dated September 02, 2025

Citation :
NA

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 33169_5931_hotel_babylon_inn_pvt_ltd.pdf

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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