GST Billing for Hotels in India — 2026 Compliance Guide
GST compliance for Indian hotels is more nuanced than most other industries. Rates differ by room tariff, F&B splits must be accurate, foreign guests trigger special rules, and e-invoicing obligations grow as your revenue scales. Get GST right and your hotel saves lakhs in penalties and ITC losses every year. Get it wrong and you face notices, interest, and disputes.
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GST Rates & Slabs for Hospitality
Room tariff slabs. From 22 September 2025, rooms charged at up to ₹7,500 per night attract 5% GST without input tax credit, and rooms above ₹7,500 attract 18% with credit. Until that date the lower slab was 12%, so older bills still carry it. The slab is decided on the amount actually charged per night after discount, not the rack rate, which matters when you run promotional or festival pricing.
Restaurant/F&B slabs. A restaurant inside a hotel attracts 18% GST with ITC if the hotel is a specified premises, broadly one that sold any room above ₹7,500 a day in the previous financial year or has opted in. In every other hotel it attracts 5% without ITC. Room service follows the same rules. Alcohol is outside GST and follows state excise.
Banquet & event slabs. Banquet rentals and event services attract 18% GST. Bundled wedding/event packages require careful invoice splitting — rooms at room slab, F&B at F&B slab, hall rental at 18%.
Anatomy of a GST-Compliant Hotel Invoice
Every GST invoice has mandatory fields that tax officers will check. Get any of these wrong and your invoice is invalid.
Mandatory Fields
Hotel name + address + GSTIN, invoice number (unique, sequential), invoice date, guest name + address, guest GSTIN if business guest.
HSN/SAC Codes
SAC 996311: Hotel accommodation. SAC 996332: Restaurant in hotels. SAC 996334: Banquet and event catering. Use the right code for each line.
CGST + SGST on Every Stay
A hotel stay is taxed where the hotel stands, so the bill carries CGST + SGST for every guest: local, out-of-state or foreign. Charging IGST because the guest's company is registered in another state is a common error.
Line-Item Splits
Room charges, F&B charges, banquet charges all need separate lines with their own GST rates. Bundled invoices invite scrutiny.
Tax Calculation
Taxable value, GST rate, GST amount per line, total. Round-off rules matter — most automation handles this; manual processes get it wrong.
Reverse Charge
Foreign OTA commissions trigger reverse charge — hotel pays GST on commission. Frequently missed. The tax paid comes back as ITC only against supplies taxed with credit, such as rooms above ₹7,500.
Three GST Mistakes Most Hotels Make
One slab for the whole stay. A guest pays ₹6,800 on weeknights (5% slab) and ₹8,200 on Saturday (18% slab). Many hotels bill the whole stay at one rate. Correct approach: the slab is tested for each night on the amount actually charged. A free upgrade does not move the slab; a paid upgrade that takes the nightly charge above ₹7,500 does.
Packages billed by habit, not by rule. A room rate that includes breakfast is generally treated as one composite supply taxed at the room slab, while meals ordered separately go on their own line at the restaurant rate. Hotels go wrong in both directions: splitting a bundled rate without a basis, or pushing separately sold meals under the room. Agree the treatment of each package with your CA once, then set it up in the system so every bill follows it.
Foreign guest billing errors. Foreign guests can be billed in foreign currency, but GST still applies in full as CGST + SGST, because a stay in India is not an export of services. You also need passport capture and Form C filing for every foreign guest.
GST That Just Works
Exceed auto-assigns the right GST slab, splits F&B correctly, and generates GSTR-ready reports. No manual work.
Indian Hotel GST Filing Calendar
Mark these dates to avoid late-filing penalties.
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Monthly Returns
GSTR-1 by 11th of next month (outward supplies). GSTR-3B by 20th of next month (summary + tax payment). Late filing: ₹50/day for nil, ₹100/day for normal returns + 18% interest on unpaid tax.
Annual Returns
GSTR-9 annual return by 31st December for previous fiscal year. Reconciles 12 months of GSTR-1 and GSTR-3B. Manual preparation is painful — automated PMS exports save weeks.
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E-Invoicing Threshold
Hotels with aggregate turnover above ₹5 crore must generate e-invoices for B2B transactions. Threshold has been dropping — plan for it. See GST billing software.
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Maximizing OTA Commission ITC Recovery
Most hotels significantly under-claim ITC on OTA commissions. The math:
₹5 crore annual revenue × 20% OTA share = ₹1 crore OTA bookings.
₹1 crore × 18% commission = ₹18 lakh OTA commissions.
₹18 lakh × 18% GST = ₹3.24 lakh GST paid (eligible as ITC).
Many hotels miss claiming this ITC because OTA invoices come in foreign currency, are routed through complex billing structures, or fall under reverse charge confusion. Audit 24 months back — most hotels recover ₹2–8 lakh in unclaimed ITC. Pair with proper hotel accounting software for India for clean reconciliation.
Related Reading
Other resources for GST and hotel finance.
Frequently Asked Questions
Common questions about GST billing for Indian hotels
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What is the GST rate for hotel rooms in India?
From 22 September 2025, hotel rooms charged at up to ₹7,500 per night attract 5% GST without input tax credit, and rooms above ₹7,500 attract 18% with credit. Before that date the lower slab was 12%. The slab follows the amount actually charged for the room each night, after discount, not the published rack rate.
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What's the GST rate for hotel restaurants?
A restaurant inside a hotel attracts 18% GST with ITC if the hotel is a specified premises, broadly one that sold any room above ₹7,500 a day in the previous financial year or has opted in. In every other hotel it attracts 5% without ITC. Room service charges through hotel F&B follow the same rules.
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When is e-invoicing mandatory for hotels?
As of 2026, hotels with aggregate turnover above ₹5 crore must generate e-invoices for B2B transactions. The threshold has been dropping over years — plan for compliance even if you're below today. B2C invoices (walk-in tourists, most bookings) don't require e-invoicing.
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How do I claim ITC on foreign OTA commissions?
Foreign OTAs (Booking.com, Expedia, Agoda) charging commission trigger reverse charge — your hotel pays GST on behalf of the OTA. The GST you pay can be claimed as input tax credit only against supplies taxed with credit, such as rooms above ₹7,500 or a restaurant in specified premises. Under the 5% room slab without ITC it becomes a cost, so review past returns with your CA.
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Does Exceed handle GST automatically?
Yes — auto-slab assignment based on actual tariff, F&B GST splits, the CGST/SGST split on every line, GSTR-1 ready exports, native Tally sync. See our GST billing software page or start free trial.
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