Room Service HSN Code: Fast-Track Guide for Businesses: 1 Minute to Understand Room Service HSN Code & Compliance Essentials

Room service is a crucial offering in the hospitality sector, allowing hotels and serviced apartments to cater to guest needs efficiently. For businesses operating in India, correctly classifying such services under the Harmonized System of Nomenclature (HSN) code ensures seamless Goods and Services Tax (GST) compliance and smooth business operations. This fast-track guide provides clarity on the appropriate HSN code for room service, the GST rate, and actionable steps for managing compliance.

What is an HSN Code?

The HSN (Harmonized System of Nomenclature) code is a standardized international system for classifying goods and services. In India, HSN codes are used for GST invoices and returns, and having the correct code is essential to avoid compliance issues and penalties.

HSN Code for Room Service

In the context of hospitality, "room service" usually refers to the provision of food, beverages, or other items to guests in their rooms. Thus, the HSN code for room service aligns with the code for "restaurant and similar services," which includes services provided by hotels, inns, guest houses, clubs, and catering services.

1. HSN Code: 9963
2. Description: Accommodation, food and beverage services
3. Sub-classification: Room service falls under 996331 (Room or unit accommodation services supplied by hotels, inns, guest houses, clubs, campsites, and other short term accommodation services)

For food and beverages supplied through room service, the more specific HSN code is 996332 (food and beverage services provided by hotels, restaurants, etc.)

Applicable GST Rates

GST rates for room service follow those for hotel accommodation and food services. If the room tariff (declared tariff per night) is:

1. Up to Rs. 1,000 – Nil GST
2. Rs. 1,001 to Rs. 7,500 – 12% GST
3. Above Rs. 7,500 – 18% GST

For room service providing food and beverages, GST is typically 5% (without ITC) or 18% (with ITC), depending on the premise's star rating and location regulations.

Best Practices for Compliance

1. Always mention the correct HSN code (9963/996332) on invoices.
2. Keep track of tariff-based GST rate differences.
3. Train front desk and accounts teams on the latest GST rules.
4. Regularly review GST notifications for updates on rates or classifications.

As a designer, having worked with many hotels and serviced spaces, I've noticed that compliance and aesthetics go hand in hand. For seamless operations, ensure your invoice templates, POS systems, and back-of-house documentation are as thoughtfully designed as your guest rooms. Even layout optimization for guest rooms can promote better efficiency for service and compliance workflows.

Tips 1:

Utilize digital billing and room management systems that auto-populate the correct HSN codes for different services. This not only minimizes the risk of manual error but also streamlines guest experience from ordering to checkout, much like how a well-designed space ensures comfort and functionality.

FAQ

Q: What is the HSN code for room service in hotels?

A: The HSN code is 9963, specifically 996331 for room accommodation and 996332 for food and beverage services via room service.

Q: What GST rate applies to room service in hotels?

A: GST rates vary based on the room tariff: Nil for up to Rs. 1,000, 12% for Rs. 1,001–7,500, and 18% above Rs. 7,500. Food room service is generally taxed at 5% or 18% depending on eligibility for input tax credit.

Q: Do I need to mention the HSN code on every invoice for room service?

A: Yes, as per GST law, mentioning the correct HSN code is mandatory for invoices to ensure proper compliance.

Q: Are hotel mini-bar and in-room dining classified under the same HSN code?

A: Yes, both services are covered under 996332, as they fall under food and beverage services provided by hotels and similar establishments.

Q: How can I make GST compliance easier for my hotel business?

A: Integrate your billing and front desk systems with up-to-date HSN code databases and regularly train staff in GST requirements to ensure accurate and compliant invoicing.