GST for hotels and restaurants after 22 September 2025
| Supply | GST | Input tax credit |
|---|---|---|
| Room tariff up to ₹7,500 per unit per day | 5% | Not available |
| Room tariff above ₹7,500 per unit per day | 18% | Available |
| Restaurant service (standalone, or hotel that is not ‘specified premises’) | 5% | Not available |
| Restaurant service in ‘specified premises’ | 18% | Available |
Whether a hotel is ‘specified premises’ depends on its room tariffs, and hotels have a declaration option; the classification decides the restaurant rate for the whole year, so it should be settled before the year starts. Food ordered through e-commerce operators is taxed in the operator’s hands. Read the detailed guide: hotel and restaurant GST from 22 September 2025.
Hostels, PGs and co-living
Residential accommodation services are exempt where the value is up to ₹20,000 per person per month and the stay is continuous for at least 90 days. Short stays, higher tariffs and bundled services such as food and laundry need separate analysis. See GST on hostels and PGs.
Accounting and MIS built for hospitality
- Revenue assurance: PMS and POS reconciled to bank, card settlements, OTA payouts and GST returns.
- Outlet-wise P&L: rooms, F&B, banquets and other operated departments.
- F&B costing: recipe costing, food cost percentage, stock counts and wastage tracking.
- KPIs: occupancy, ADR, RevPAR, cost per occupied room and payroll to revenue.
- Seasonal cash-flow: planning for low season, advance deposits and capex.
- Compliance: TDS on OTA commissions and contractors, TCS by e-commerce operators, and state licences.
Why this is a focus area
CA Prabhakar Kumar has served as Associate Vice President, Finance, at a multi-resort hospitality group in Pune, leading budgeting, forecasting and Power BI reporting across properties. The firm’s hospitality work applies that operating experience to GST, audit and MIS for hotels, resorts, restaurants, hostels and co-living operators.
Tourism incentives
State tourism policies, including Maharashtra’s, offer incentives for eligible hospitality projects, such as capital subsidies, stamp duty and electricity duty benefits. Eligibility and documentation are project-specific; the firm prepares project reports and supports the application documentation.
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