GST for Hotels & Hospitality Businesses – Complete Guide to Rates, Registration & Compliance

Your central hub for every GST compliance requirement across the hospitality sector — hotels, resorts, restaurants, banquet halls, cloud kitchens, cafes, and more. Rates, ITC rules, OTA compliance, TCS, invoicing, and refunds — all in one place.

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Quick Summary – GST for Hotels & Hospitality Businesses

  • Scope: Complete GST compliance framework for hotels, resorts, restaurants, banquet halls, cloud kitchens, cafes, catering, food trucks, and food manufacturers.
  • Rate Range: 5% to 18% — depending on the business type, room tariff, and service category.
  • Hospitality Rate: 5% for hotels/restaurants with tariff ≤ ₹7,500/day; 18% for hotels/restaurants with tariff > ₹7,500/day; 18% for banquet halls.
  • ITC Rules: 5% slab → no ITC; 18% slab → full ITC available.
  • Registration Threshold: ₹20 Lakh (normal states) / ₹10 Lakh (special category states).
  • Aggregator Rule: Listing on Swiggy, Zomato, MakeMyTrip, Booking.com triggers mandatory GST registration regardless of turnover.
  • TCS on Aggregators: 1% TCS deducted by Swiggy/Zomato/OTAs on net taxable value.
  • Key Compliance: GSTR-1, GSTR-3B, GSTR-9, TCS reconciliation, and ITC apportionment for mixed-slab businesses.
  • Government Fees: Nil for GST registration, return filing, and LUT. Only professional fees apply.

Takeaway: Hospitality is one of the most complex sectors for GST because every business type — from a luxury resort to a food truck — operates under its own rate structure, ITC eligibility, and compliance obligations. This page connects you to the exact guidance for your business.

1. Introduction – Why GST is Complex for Hospitality

India's hospitality sector is remarkably diverse. A luxury resort in Udaipur, a QSR in Bengaluru, a cloud kitchen in Mumbai, a banquet hall in Delhi, and a food truck in Pune — all fall under the umbrella of "hospitality," but each operates under a completely different GST framework.

A hotel charges 5% or 18% based on the ₹7,500 per day room tariff. A standalone restaurant charges 5% without ITC. A banquet hall charges a mandatory 18% with full ITC. A cloud kitchen charges 5% without ITC. A restaurant inside a luxury hotel charges 18% with ITC. And every one of these businesses must navigate aggregator compliance (Swiggy, Zomato, MakeMyTrip), TCS deductions, invoicing rules, and monthly GST filings.

Getting the GST framework right is not just about compliance — it directly impacts your pricing strategy, profit margins, and cash flow. A hotel that misreads the ₹7,500 threshold could either overcharge its guests or under-claim its ITC. A restaurant that bundles alcohol with food in a single bill invites a GST notice. A banquet hall that misses advance-booking GST faces interest and penalties.

This page is designed as your single reference point for all hospitality GST compliance. Explore the topic cards below to dive into the specific guidance for each business type.

Takeaway: Hospitality GST is not one framework — it is a family of related frameworks. Understanding your specific category is the first step toward compliance.

2. GST Rates at a Glance – Every Hospitality Segment

Here is the complete rate matrix for the hospitality sector in one view:

Business TypeGST RateITC Available
Hotel – Room Tariff ≤ ₹7,500/day5%No
Hotel – Room Tariff > ₹7,500/day18%Yes
Resort – Room Tariff ≤ ₹7,500/day5%No
Resort – Room Tariff > ₹7,500/day18%Yes
Standalone Restaurant / QSR / Cafe5%No
Cloud Kitchen / Food Truck5%No
Restaurant inside Hotel (tariff ≤ ₹7,500)5%No
Restaurant inside Hotel (tariff > ₹7,500)18%Yes
Banquet Hall / Marriage Garden / Convention Centre18%Yes
Outdoor Catering5% (no ITC) or 18% (with ITC)Depends on option
Alcohol (all hospitality types)Outside GST — State ExciseNot applicable
Example – Same Building, Different Rates: A hotel complex has rooms at ₹6,000/night, a standalone restaurant, and a banquet hall. Each operates under a different GST rate: 5% for rooms (no ITC), 5% for the restaurant (no ITC), and 18% for the banquet hall (with ITC). The hotel must maintain separate accounting and ITC apportionment for each.

Takeaway: Hospitality businesses often have multiple GST rates running in parallel. Clear segregation of revenue and expense streams is essential.

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4. GST Registration Roadmap for Hospitality Businesses

Whether you run a hotel, restaurant, or banquet hall, the GST registration journey follows a similar path. Here is the step-by-step roadmap:

Step-by-Step Registration

Step 1 – PAN & Business Docs

Ensure PAN card, business constitution proof, and authorised signatory documents are ready.

Step 2 – Address Proof

Electricity bill, rent agreement, and NOC from property owner for the business premises.

Step 3 – GST Portal Registration

File GST REG-01 on the GST portal with all supporting documents.

Step 4 – Verification

Aadhaar authentication or physical verification by the GST officer.

Step 5 – GSTIN Issuance

GSTIN issued within 7-10 working days. You are now GST-registered.

Step 6 – Compliance Setup

Setup invoicing system, TCS reconciliation process, and ITC tracking.

When Registration is Mandatory

  • Turnover Exceeds Threshold: ₹20 Lakh (normal states) or ₹10 Lakh (special category states).
  • Aggregator Listing: Any listing on Swiggy, Zomato, MakeMyTrip, Booking.com, Agoda triggers mandatory registration.
  • Interstate Supply: Making supplies to customers in other states.
  • Reverse Charge: Liable to pay tax under reverse charge on certain services.

Takeaway: For most hospitality businesses, aggregator listing is the trigger that forces registration. Do not wait to hit the turnover threshold.

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5. Common Compliance Themes Across Hospitality

Regardless of your specific business type, these compliance themes apply to every hospitality business:

Aggregator Compliance (Swiggy, Zomato, MakeMyTrip, Booking.com)

  • 📌 TCS Deduction: 1% TCS on net booking value. Claim credit in GSTR-3B.
  • 📌 Platform Fees: 18% GST on platform/commission fees. ITC claimability depends on your rate slab.
  • 📌 Invoicing: The business must issue GST invoice to the guest/customer — not the aggregator.

ITC Tracking and Apportionment

  • 📌 5% Slab: No ITC on any expenses. All GST paid becomes a cost.
  • 📌 18% Slab: Full ITC on inputs, services, and capital goods (except blocked credit on construction).
  • 📌 Mixed-Slab: ITC must be apportioned based on revenue or floor area. Document the method and apply consistently.

Invoicing Standards

  • 📌 SAC Code: 9963 for accommodation, restaurant, and banquet services. 9997 for event management.
  • 📌 Place of Supply: Location of the hospitality property, not the guest's home address.
  • 📌 Alcohol: Billed separately under State Excise laws. Never included in the GST invoice.
  • 📌 ITC Declaration: For 5% slab invoices, mention "ITC not available" to inform guests.

Return Filing and Reconciliation

  • 📌 GSTR-1: Report outward supplies, including aggregator orders.
  • 📌 GSTR-3B: Claim ITC (if applicable) and pay tax liability.
  • 📌 GSTR-9: Annual reconciliation of all transactions.
  • 📌 TCS Reconciliation: Match aggregator reports with GSTR-2A TCS credit monthly.

Takeaway: The compliance principles are the same across all hospitality types — only the specific rate and ITC rules differ.

6. Key GST Compliance Deadlines for Hospitality

Missing a deadline costs money, time, and credibility. Here are the critical dates every hospitality business must track:

Compliance ActivityDeadlineConsequence of Missing
GSTR-1 (Monthly)11th of following monthLate fee and interest; TCS reconciliation breaks
GSTR-3B (Monthly)20th of following monthLate fee and interest; ITC chain broken
GSTR-9 (Annual)31 December of following FYPenalty up to 0.50% of turnover
TCS ReconciliationMonthly, before GSTR-3B filingUnclaimed TCS credit = lost money
ITC Reversal (if applicable)Before annual return filingInterest and penalty on overstated ITC
Example – Deadline Impact: A hotel with ₹15 lakh monthly revenue from aggregator bookings misses the GSTR-1 due date by 5 days. Late fee of ₹250 per day applies (₹1,250 total). More importantly, its TCS credit gets delayed in GSTR-2A, which then delays its GSTR-3B ITC claim. The cash flow impact from a 5-day lapse can be up to ₹30,000.

Takeaway: Build a compliance calendar with all deadlines and set automated reminders 5 days before each one.

7. Common GST Mistakes Across the Hospitality Sector

These are the most frequent errors made by hospitality businesses — regardless of segment.

Wrong Rate Applied

Using 5% when 18% is applicable (or vice versa) due to misunderstanding the ₹7,500 threshold or business type. Correct your invoices and pay differential tax with interest.

ITC Claimed on 5% Slab

Claiming ITC while operating under the 5% no-ITC slab. Reverse the ITC with interest immediately. This is a common audit trigger.

Missing TCS Reconciliation

Not claiming TCS credit from aggregators. Download reports monthly, match with GSTR-2A, and claim in GSTR-3B.

Bundling Alcohol with Food

Including alcohol in the taxable value of food/room bills. Alcohol must be billed separately under State Excise laws.

Not Registering Despite Aggregator Listing

Operating without GST registration while listed on Swiggy, Zomato, MakeMyTrip, or Booking.com. This is a mandatory trigger.

Wrong Place of Supply

Using the guest's home state instead of the property's location. This causes incorrect CGST/SGST vs IGST calculation.

Not Issuing GST Invoices

Issuing non-GST bills or skipping invoice details like SAC code and GSTIN. Every taxable supply requires a valid GST invoice.

Skipping Annual Return

Not filing GSTR-9 despite exceeding the turnover threshold. Penalties can reach 0.50% of turnover.

Takeaway: Most hospitality GST errors stem from a misunderstanding of rate slabs, ITC rules, and aggregator compliance. Get these three right, and your business stays clean.

8. Frequently Asked Questions – GST for Hotels & Hospitality

Hotels charge 5% for rooms with tariff up to ₹7,500/day and 18% for rooms above ₹7,500/day. Standalone restaurants charge 5% without ITC, while restaurants inside hotels with tariff above ₹7,500 charge 18% with ITC.
Banquet halls, marriage gardens, and convention centres are taxed at 18% with full ITC. There is no 5% option available for banquet services.
Yes, if your aggregate turnover exceeds ₹20 Lakh (₹10 Lakh in special category states). You must also register if you list on any aggregator (Swiggy, Zomato, MakeMyTrip, Booking.com) or make inter-state supplies.
Only if they are inside a hotel with room tariff above ₹7,500 per day and charge 18% GST. Standalone restaurants charging 5% cannot claim ITC on any expenses.
It is the per-night room tariff that determines whether a hotel charges 5% or 18% GST. If the room tariff is ₹7,500 or below, the hotel charges 5% without ITC. If above ₹7,500, it charges 18% with ITC.
Aggregators deduct 1% TCS on the net value of taxable supplies. This TCS appears in your GSTR-2A and can be claimed as credit in GSTR-3B against your GST liability.
No. Alcohol is outside the purview of GST and is subject to State Excise laws. It must be billed separately from food and accommodation.
SAC 9963 covers accommodation, restaurant, and banquet services. For event management, SAC 9997 is applicable.
ITC on construction of buildings and civil structures is generally blocked under Section 17(5). However, ITC on plant and machinery (lifts, HVAC, kitchen equipment) is available. Some apportionment may be possible for 18% slab supplies.
If the package is a composite supply (room + meals + transfers), it is taxed at the rate applicable to the principal supply (accommodation). If optional services are bundled, the package may be taxed at the highest rate as a mixed supply.
GSTR-1 is due on the 11th of the following month, and GSTR-3B is due on the 20th. GSTR-9 annual return is due by 31 December of the following financial year.
Yes. Cancellation charges are treated as a supply of service and are taxed at the same rate as the original service — 5% or 18% for hotels, 18% for banquets.
The place of supply is the location of the hospitality property (hotel, restaurant, banquet hall), not the customer's home state.
Yes, GSTR-9 is mandatory for businesses whose aggregate annual turnover exceeds the notified threshold. It must be filed by 31 December of the following financial year.
For GST compliance issues, contact the GST helpdesk at 1800-103-4786. For expert assistance with your hospitality business's GST compliance, contact DisyTax at 7065281345 or email admin@disytax.com.
Disclaimer: This guide is for general information only and does not constitute legal or professional advice. GST rates, rules, and hospitality-specific provisions change periodically. Please verify all details with the official GST portal or consult a qualified professional before acting on this information.

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