GST Exemption Limits for Hotel Rooms in India: Updates and Clarifications

Travel enthusiasts and business travelers alike often want to be aware of the tax implications of their accommodation choices. In India, the Goods and Services Tax (GST) plays a critical role in how taxes are levied on hotel rooms. As of my last update, the GST exemption limits for hotel rooms in India are subject to specific criteria and conditions. This article is designed to provide you with the latest information, clarifications, and updates regarding the GST exemptions for hotel rooms.

Current GST Exemption Limits for Hotel Rooms

For as of August 2023, the GST exemption threshold for hotel accommodation in India has been defined as follows:

Hotel Rooms Priced Up to 1000 Per Day: These are exempt from GST. Hotel Rooms Priced Between 1001 and 7500 Per Day: A GST rate of 12 applies. Hotel Rooms Priced Above 7500 Per Day: A GST rate of 18 applies.

It is important to verify this information with the latest updates from the relevant tax authorities, as tax regulations can change.

Additional Considerations for GST Levied on Hotel Rooms

There are additional rules to consider regarding the determination of GST on hotel rooms:

Declared Tariff: GST will be charged if the rate is above Rs 1000, but importantly, the declared tariff of the hotel room must be above Rs 1000. This means the room rate without any discounts should be considered. Example: If a hotel room is listed at Rs 1200 per day but a discount of Rs 300 is provided, the total charge would be Rs 900. However, GST would still be levied because the declared tariff exceeded Rs 1000. Note: GST should be levied on the Rs 900, not the full Rs 1200. Multiple Rate Considerations: If a hotel rate is listed at different places (e.g., website, reception, tariff card), the highest rate among them is taken as the declared tariff for determining the GST applicability.

As of July 18, 2022, the tax structure has undergone some changes:

For Hotel Rooms Under Rs 1000 Per Day: GST at 12% is applicable, and the exemption of Hotel Rooms has been withdrawn. For Rooms Priced Between Rs 1000 and Rs 2500 Per Day: A 12% tax rate is applied. For Rooms Priced Between Rs 2500 and Rs 5000 Per Day: A 18% tax rate is applied. For Rooms Priced Over Rs 5000 Per Day: A 28% GST rate is applied.

Conclusion

Understanding the GST exemptions and applicable taxes for hotel rooms is crucial for budget planning and informed decision-making during travel. The changes and criteria outlined above can impact the total cost of your stay, and it is advisable to verify the latest information from authorized departments.

By staying informed about these updates, you can better plan your travels and manage your accommodation expenses effectively.