GST on Hotels in India 2026 — Complete Guide (Slabs, SAC Codes, e-Invoice)

GST billing for hotels in India is one of the most misunderstood compliance requirements in the hospitality industry. Get the slab wrong and you under-charge guests. Use the wrong SAC code and your GSTR-1 gets flagged. Miss e-invoicing thresholds and face penalties. This is the most complete guide to hotel GST in India for 2026 — covering every GST slab, SAC code, restaurant tax rate, input tax credit rule, e-invoicing requirement and common mistake. Whether you run a 10-room guesthouse or a 100-room hotel, this guide applies to you.

GST Slabs for Hotel Accommodation in India (2026)

Hotel room GST in India is calculated on the declared tariff (also called the published tariff or rack rate) — not the amount actually paid after discounts: ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Declared Tariff per Night → GST Rate ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ ₹0 to ₹999 → 0% GST (exempt) ₹1,000 to ₹7,499 → 12% GST ₹7,500 and above → 18% GST ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Key point: If your declared tariff is ₹7,000 and you offer a 20% discount, the guest pays ₹5,600 — but GST is still calculated at 12% on ₹7,000 (₹840), not on ₹5,600. The tariff that determines the slab is your declared rate, not the discounted amount. If your declared tariff is ₹7,500 or above and you offer any discount, GST remains at 18%.

What is SAC Code 9963?

SAC (Services Accounting Code) is the GST equivalent of HSN codes for services. Every hotel invoice must carry the correct SAC code. SAC codes for hotels: • SAC 9963 — Accommodation services (all hotel rooms, guesthouses, hostels) • SAC 99631 — Room accommodation (standard hotel rooms) • SAC 99632 — Camping accommodation and other short-stay accommodation SAC codes for hotel restaurants: • SAC 9964 — Food and beverage services • SAC 99641 — Restaurant and mobile food service (non-AC) • SAC 99642 — Catering services for events and functions Using the wrong SAC code on an invoice is a compliance error that can trigger GST notices. A good hotel billing software pre-fills the correct SAC code automatically based on the charge type.

Restaurant GST Rates Inside Hotels

If your hotel has a restaurant, the GST rates for food and beverages are separate from accommodation GST: ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Restaurant Type → GST Rate → Input Tax Credit ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Non-AC restaurant → 5% GST → No ITC AC restaurant → 18% GST → ITC available Room service (tariff below ₹7,500) → 5% → No ITC Room service (tariff ₹7,500+) → 18% → ITC available Banquet / outdoor catering → 18% → ITC available ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Room service GST follows the room tariff slab — if your room rate is above ₹7,500, room service charges attract 18% GST even if your restaurant would normally be 5%. If your restaurant has both AC and non-AC seating, the GST rate depends on where the guest is seated — not the restaurant as a whole.

Input Tax Credit (ITC) for Hotels

Input Tax Credit lets you reduce your GST liability by claiming credit for GST you have already paid on business purchases. Hotels CAN claim ITC on: • Hotel furniture, fixtures and fittings • Air conditioners, geysers, electrical equipment • Software and technology (including hotel PMS) • Linen, towels and housekeeping supplies • Staff uniforms • Marketing and advertising services • Professional services (CA, legal, consultant fees) Hotels CANNOT claim ITC on: • Food and beverages sold at 5% GST (non-AC restaurant) • Personal use items • Motor vehicles (unless used for rent-a-cab service) • Construction services for personal use ITC claimed must be matched with your vendor's GSTR-1 before you can use it. If your vendor has not filed their GST return, you cannot claim ITC for that invoice.

GST Registration Requirements for Hotels

Which hotels must register for GST: • Annual turnover above ₹20 lakh (₹10 lakh for special category states like J&K, Himachal, Uttarakhand, Northeast) • Any hotel that supplies services across state lines (inter-state supply) • Hotels registered on OTAs like MakeMyTrip or Booking.com — these platforms may require a GSTIN GST registration is voluntary below ₹20 lakh, but recommended if: • You serve corporate clients who need tax invoices with GSTIN • You want to claim ITC on your hotel's purchases • You are listed on OTAs that remit TCS (Tax Collected at Source) Once registered, you must file GSTR-1 (outward supplies) monthly or quarterly, and GSTR-3B (summary return) monthly.

e-Invoicing for Hotels — Who Needs It

e-Invoicing (electronic invoicing) is mandatory for GST-registered businesses above a turnover threshold. For hotels: • Turnover above ₹5 crore annually: e-invoicing mandatory (as of August 2023) • Turnover below ₹5 crore: e-invoicing optional but recommended What is e-invoicing? It means your hotel invoice is registered on the GSTN Invoice Registration Portal (IRP) and receives a unique IRN (Invoice Reference Number) and QR code. The invoice is only valid once it carries the IRN. For B2B invoices (corporate clients with GSTIN), e-invoicing is mandatory if your turnover crosses the threshold. B2C invoices (individual guests) are exempt from e-invoicing but must carry a QR code above ₹500. A hotel PMS that supports e-invoicing sends each invoice to the IRP automatically and receives the IRN within seconds — no manual uploading required.

GST on OTA Bookings — How TCS Works

When a guest books your hotel through MakeMyTrip, Booking.com, Goibibo or any other OTA, the OTA collects TCS (Tax Collected at Source) at 1% of the booking value. How OTA GST and TCS works: 1. Guest pays ₹10,000 + 12% GST = ₹11,200 to MakeMyTrip 2. MakeMyTrip deducts their commission (say 15%) and TCS 1% 3. MakeMyTrip remits the balance to your hotel 4. MakeMyTrip files GSTR-8 declaring TCS collected 5. You claim this TCS credit in your GSTR-3B The GST on the room itself is your responsibility to pay — not the OTA's. The OTA only collects TCS as a tax mechanism. You must report the full booking value in your GSTR-1 and pay the applicable GST. This is one of the most common areas of confusion for hotel owners. Your hotel PMS should help you separate OTA bookings, calculate the correct GST, and generate the correct invoice even for OTA bookings.

How to Raise a Correct GST Invoice for a Hotel Guest

A valid GST tax invoice for hotel accommodation must contain: ✓ Hotel name, address and GSTIN ✓ Invoice number (sequential, unique) ✓ Invoice date ✓ Guest name and address ✓ Guest GSTIN (for B2B bookings) ✓ Description of service (room type, number of nights) ✓ SAC code (9963 for accommodation) ✓ Declared tariff (before discount) ✓ Discount amount (if any) ✓ Taxable value (tariff × nights) ✓ GST rate (12% or 18%) ✓ CGST and SGST amounts (for intra-state) or IGST (for inter-state) ✓ Total amount ✓ Place of supply (state where the hotel is located) For B2C invoices above ₹500, also include a QR code. For e-invoicing eligible businesses, also include IRN and QR code from IRP. A hotel billing software generates all of this automatically. Manual invoices risk missing mandatory fields and creating compliance issues.

GSTR Filing Requirements for Hotels

GST-registered hotels must file these returns: GSTR-1 (Outward Supplies) • Monthly filers: Due 11th of next month • Quarterly filers (QRMP scheme, turnover below ₹5 crore): Due 13th of next quarter • Must report all tax invoices, credit notes and debit notes GSTR-3B (Summary Return) • All registered taxpayers: Due 20th of next month • Summary of all outward and inward supplies and tax payment GSTR-9 (Annual Return) • Mandatory for turnover above ₹2 crore • Due 31st December of next financial year GSTR-9C (Reconciliation Statement) • Mandatory for turnover above ₹5 crore • Requires CA certification • Reconciles your books with GST returns Hotel PMS software like StayDesk generates GSTR-1 and GSTR-3B compatible reports automatically, making your monthly filing fast and accurate.

Common GST Mistakes Hotels Make (and How to Avoid Them)

1. Wrong GST slab — Using 12% when declared tariff is ₹7,500 or above (should be 18%). Always check: is your declared tariff ₹7,500+? Then it's 18%. 2. GST on discounted rate instead of declared tariff — GST always applies to the declared tariff, even if the guest paid a discounted rate. 3. Incorrect SAC code — Using SAC 9963 for restaurant charges (should be 9964). Each type of charge must carry its own SAC code. 4. Missing GSTIN on B2B invoices — Corporate clients need their GSTIN on the invoice to claim ITC. Missing GSTIN means the client cannot claim their credit. 5. Not separating accommodation and dining — Mixing room charges and restaurant charges on one line. These attract different GST rates and must be itemised separately. 6. GST on advance payment — If a guest pays an advance, GST applies at the time of advance receipt, not at checkout. 7. Not claiming eligible ITC — Many hotels miss ITC on software subscriptions, professional services and maintenance. Review your purchase invoices quarterly. 8. Wrong place of supply — For inter-state bookings (guest from another state), IGST applies, not CGST+SGST. The place of supply is always where the hotel is located.

GST for Different Types of Hotel Charges

Hotels often have multiple revenue streams. Each attracts a different GST rate: ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Charge Type → GST Rate → SAC Code ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Room accommodation (₹1k–₹7.4k tariff) → 12% → 9963 Room accommodation (₹7.5k+ tariff) → 18% → 9963 Non-AC restaurant → 5% → 9964 AC restaurant → 18% → 9964 Room service (low tariff room) → 5% → 9964 Room service (high tariff room) → 18% → 9964 Laundry and pressing → 18% → 9997 Parking (long-term) → 18% → 9967 Event hall / banquet rental → 18% → 9963 Spa and wellness services → 18% → 9997 Internet / Wi-Fi charges → 18% → 9984 Travel desk / transport → 5% or 18% → 9964 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Note: Many hotels bundle Wi-Fi, parking and breakfast into room packages. Bundled services follow the GST rate of the principal supply (accommodation). However, if these are charged separately on the invoice, they attract their own GST rates.

How Hotel PMS Software Handles GST Automatically

Manual GST calculation for a hotel with multiple room types, a restaurant and ancillary services is error-prone and time-consuming. A hotel PMS like StayDesk automates the entire process: 1. Declared tariff configuration — Set your declared tariff for each room type once. StayDesk picks the correct GST slab automatically. 2. Multi-rate invoice — A guest folio with room, restaurant, laundry and parking automatically splits each line item with the correct GST rate and SAC code. 3. B2B vs B2C detection — If the guest has a GSTIN (corporate booking), the invoice switches to tax invoice format with IGST/CGST/SGST split. 4. e-Invoice integration — For eligible hotels (turnover above ₹5 crore), StayDesk submits each invoice to the IRP and attaches the IRN automatically. 5. GSTR-1 export — Monthly export of all invoices in GSTR-1 format, ready to upload to the GST portal or share with your CA. 6. OTA booking reconciliation — Separate tracking of OTA bookings to account for TCS deducted by OTAs. If you are still doing GST calculations manually or in Excel, you are spending hours every month and risking errors. A hotel PMS pays for itself in the time and penalties it saves.

Frequently Asked Questions — Hotel GST India

Q: Is GST applicable on hotel rooms below ₹1,000? A: No. Hotel accommodation with a declared tariff below ₹1,000 per night is exempt from GST. Q: What if my hotel has different room types — some above ₹7,500 and some below? A: Each room type is taxed based on its own declared tariff. A deluxe room at ₹8,000 attracts 18% while a standard room at ₹4,000 attracts 12%. They are calculated independently. Q: Do I charge GST on the booking amount or the check-in tariff? A: GST is charged on the declared tariff at the time of invoice. If tariffs change between booking and check-in, the rate at time of invoice (usually check-out) applies. Q: Can I register for GST voluntarily even if my turnover is below ₹20 lakh? A: Yes. Voluntary GST registration lets you issue proper tax invoices to corporate clients and claim ITC on your purchases. Many small hotels benefit from voluntary registration. Q: Is GST applicable on hotel bookings made by government employees? A: Government employees on official travel may be eligible for GST exemption if staying in government-approved accommodation. Check the specific notification for your state. Q: How is GST charged on long-stay guests (monthly rentals)? A: Continuous stay beyond 30 days where the residential purpose is declared is exempt from GST. This is a common exemption for PG accommodations and long-stay corporate apartments. Q: What is the GST rate on hotel accommodation in a special economic zone (SEZ)? A: Hotels inside SEZ areas may be eligible for zero-rated supply (0% GST). Consult your CA for the specific applicable rules.

GST Compliance Checklist for Hotel Owners

□ GSTIN displayed on all tax invoices □ Correct GST slab applied based on declared tariff (not discounted price) □ SAC 9963 for rooms, SAC 9964 for food and beverages □ CGST + SGST for intra-state, IGST for inter-state guests □ Guest GSTIN captured for all corporate/B2B bookings □ Separate line items for accommodation and dining on every invoice □ e-Invoice IRN attached (if turnover above ₹5 crore) □ GSTR-1 filed by 11th of every month □ GSTR-3B filed by 20th of every month □ ITC claimed monthly and reconciled with vendor filings □ OTA TCS claimed in GSTR-3B (Table 8 — TCS credit) □ GSTR-9 annual return filed by 31st December □ Digital records of all invoices kept for 6 years StayDesk automates 9 of these 13 checklist items. The remaining 4 (GSTR filing, ITC reconciliation, annual return and record keeping) are simplified with StayDesk's one-click export reports.