Hotel GST in India (2026): What Independent Hotels Need to Know

Hotel GST in India changed meaningfully in 2025, and the new structure is good news for most independent hotels. Here's the current 2026 picture, in plain language.

This is general information, not tax advice. GST rules change — confirm the current rates and your obligations with a qualified chartered accountant.

For the full guide (corporate invoices, IGST, common mistakes): GST for hotels in India.

The current hotel room GST rates

Do hotels charge GST? Registered hotels generally yes, on taxable rooms and services. Since the reform effective 22 September 2025, GST on hotel rooms is based on the room tariff:

Room tariff per night	GST rate	Input Tax Credit
Up to ₹7,500	5%	Not available
Above ₹7,500	18%	Available

The big change: rooms up to ₹7,500 moved from 12% to 5%, which lowers the tax most independent hotels charge. Note that the rate depends on the tariff, not your star rating. Many lodge bills follow the same accommodation idea — confirm your category with your CA.

How to calculate GST on a hotel bill

1. Take the actual room tariff for the night.
2. Apply 5% (≤ ₹7,500) or 18% (above).
3. Split as CGST + SGST (same state) or IGST when configured for interstate B2B.

Example: ₹4,000 room → GST ₹200 (₹100 CGST + ₹100 SGST) → guest pays ₹4,200 for the room.
Example: ₹9,000 room → GST ₹1,620 → guest pays ₹10,620 for the room.

SAC code 996311

Put SAC 996311 on room / accommodation lines. Corporate AP teams look for it. Keep restaurant and laundry on their own codes and lines.

CGST + SGST vs IGST

Same-state stays usually show CGST + SGST. Can a hotel charge IGST? Yes when the supply is treated as interstate B2B — same 5% or 18% combined rate, different form. Do not print IGST on every same-state walk-in.

Can guests claim ITC on hotel bills?

• Can we claim GST on hotel bill / take GST input? Only for eligible B2B stays with a proper tax invoice.
• On the 5% room slab, ITC on that accommodation is generally not available.
• On the 18% slab, ITC may be available when rules and the invoice allow.
• For corporate travel: share company GSTIN and ask for a tax invoice, not only an OTA voucher.

Restaurant and food is taxed separately

Room and food are billed under separate GST treatment. In hotels whose rooms stay at or below ₹7,500, the in‑house restaurant is generally 5% (no input credit). In "specified premises" — where any room crossed ₹7,500 in the previous year — restaurant service is 18% (with input credit). Keep these on separate line items.

What your invoice must show

A compliant tax invoice isn't just a printed bill. It needs:

• Your hotel's name, address and GSTIN
• A unique, sequential invoice number and date
• The guest's details (and GSTIN, if they want input credit)
• SAC 996311 on rooms
• A clear description of the stay
• The taxable value, the GST rate, and CGST + SGST shown separately (or IGST for inter‑state corporate billing)

Corporate guests in particular need a proper GST invoice to claim input credit, so getting these fields right protects both you and your guest.

Why this is hard to do by hand

Applying the correct slab per booking, splitting CGST/SGST, numbering invoices sequentially, and keeping records for filing is fiddly and error‑prone on paper or in a spreadsheet — and small mistakes add up at filing time.

How BitLegacy Hotels helps

BitLegacy Hotels generates GST‑compliant invoices automatically — the right slab, CGST/SGST split, sequential numbering and your GSTIN — so billing is correct every time, without manual calculation. BitLegacy folio supports credit notes for issued invoices — see Product and Pricing.

Need a period GST register for your CA (not only single invoices)? Install the free Accounting Marketplace unlock — GST register guide · Accounting overview.

Start a 60‑day free trial and see it on your own bookings.