GST on Hotel Room Booking: What Rate Applies Now?
GSTZone Desk · Updated 2026
Short answer
A hotel room priced up to ₹7,500 per unit per day is taxed at 5% GST. Above ₹7,500, it’s 18% GST, and the hotel gets to claim input tax credit at that rate.
In detail
Since the GST rate reset that took effect on 22 September 2025, hotel accommodation moved onto a simple ₹7,500-a-day line. Below or at that number, you’re in the 5% bracket. Cross it, even by ₹1, and the whole room moves to 18%.
The trade-off mirrors the restaurant rule: the 5% bracket comes without input tax credit for the hotel, while the 18% bracket comes with full ITC. That’s a deliberate design choice — lower headline tax for budget stays, full credit chain for premium ones.
This ₹7,500 threshold is also the same number that decides whether a hotel counts as ‘specified premises’ for the following year — which in turn decides the GST rate its in-house restaurant charges, regardless of the room rate on any specific night.
GSTZone tip
If your room rate hovers right around ₹7,500 depending on the season or a discount code, check the actual invoiced price for that specific booking — the rate is decided per unit per day at the price actually charged, not by the hotel’s rack rate.
Related questions
Is this ₹7,500 based on the room’s declared tariff or the actual price paid?+
It’s based on the value of supply actually charged for that unit of accommodation for that day — the real transaction value, not a listed rack rate.
Does a discount or coupon that brings the price below ₹7,500 change the rate?+
Generally yes — the rate follows the value actually charged for that specific supply, so a discount that genuinely brings the invoiced price to ₹7,500 or below shifts it into the 5% bracket for that booking.
Want the law itself?
Go deeper on GST Rates
This page answers one question. Our GST Knowledge Hub carries every section and rule behind it — the exact legal text, what it means in plain English, and how it has been amended. Free, no login.
Need this sorted for your specific case?
Every business’s facts are a little different. Talk to a GSTZone expert — we’ll tell you exactly where you stand, and handle the filing if you need it.
Or call +91 97554 06939 · WhatsApp us