GST billing for hotels in India follows a slab-based system tied to your declared room tariff. Getting this wrong leads to incorrect invoices, GST notices and penalties. This guide covers everything you need to know about GST for hotels in 2026.
GST Slabs for Hotels
The GST slabs for hotel accommodation in India as of 2026: • ₹0 – ₹999 per night: 0% GST (no tax) • ₹1,000 – ₹7,499 per night: 12% GST (SAC code 9963) • ₹7,500 and above per night: 18% GST (SAC code 9963) The slab applies to the declared tariff, not the actual amount paid. If your room rate is ₹7,000 but you offer a 20% discount, GST is still calculated at 12% on the base price.
What is SAC Code 9963?
SAC (Services Accounting Code) 9963 is the GST classification for accommodation services. All hotel room charges must use SAC 9963 on the invoice. Restaurant food and beverages within the hotel use SAC 9964 at 5% or 18% GST depending on whether the restaurant has AC seating.
Restaurant GST in Hotels
Hotel restaurant GST depends on the type of dining: • Non-AC restaurant: 5% GST (SAC 9964), no input tax credit • AC restaurant: 18% GST (SAC 9964), input tax credit available • Room service / in-room dining: 18% GST when room tariff exceeds ₹7,500 Most hotels with mid-range tariffs charge 5% GST on food and 12% on accommodation.
How StayDesk Handles GST Billing
StayDesk automates GST billing completely: 1. You set the declared tariff for each room type 2. StayDesk automatically selects the correct GST slab 3. SAC codes are pre-filled on every invoice 4. Room charges and restaurant charges are taxed separately at correct rates 5. GST invoices are generated instantly at checkout 6. Monthly GST reports are ready for your CA or GST filing
Common GST Mistakes Hotels Make
• Applying wrong GST slab — using 12% when tariff exceeds ₹7,500 • Incorrect SAC codes — using room SAC for restaurant charges • Missing GSTIN on invoices — mandatory for B2B guests • Not separating taxable components — parking, laundry have different GST rates • Wrong GST on discounted rates — GST applies to undiscounted tariff, not actual payment
Ravi K.
Finance & tax advisor for hospitality businesses. CA with 12 years experience.