Understanding New GST Rates on Hotel Room Rent: Fast-Track Guide to Navigating the Latest GST Changes

The Goods and Services Tax (GST) regime in India significantly affects the hospitality sector, particularly when it comes to hotel room rent. Understanding the new GST rates on hotel room rent is crucial for both travelers and business owners. As of the latest updates, the GST rates on hotel accommodations are tiered based on the room tariff per night. Here’s how it works:

1. Room rent less than ₹1,000 per night: No GST applicable.
2. Room tariff between ₹1,001 and ₹7,500 per night: 12% GST is levied.
3. Room tariff above ₹7,500 per night: 18% GST is charged.

These rates are based on the declared tariff, not necessarily the price you eventually pay after discounts. This means if a hotel lists a room at ₹8,000 but offers you a discount, the GST will be calculated based on ₹8,000. The government introduced these brackets to streamline taxation and make the hospitality industry more transparent. It’s worth noting that these rates can change based on GST Council meetings, so always check the latest notifications or consult your hotel before booking.

As a designer, whenever I work on home designer projects for boutique hotels or curated stays, I always consider these GST brackets in the pricing strategy. Ensuring your listed prices align strategically with GST slabs can create a better value proposition for guests—if you maintain room tariffs just below an important GST threshold, guests see greater affordability without impacting the quality of the design or experience. This is a design-driven approach to not only aesthetics but also financial planning in hospitality.

Tips 1:

When setting up hotel rooms or rental accommodations, keep clear documentation of your declared tariffs and display them transparently. It prevents confusion for clients and ensures compliance with GST rules.

FAQ

Q: What is the GST rate for a hotel room costing ₹2,000 per night?

A: The GST rate for a room with a tariff between ₹1,001 and ₹7,500 per night is 12%.

Q: Does GST apply to discounted hotel rates?

A: GST is calculated based on the declared tariff, not the discounted or actual amount paid.

Q: Are there any exemptions from GST on hotel rooms?

A: Yes, rooms with a declared tariff less than ₹1,000 per night are exempt from GST.

Q: How often do GST rates on hotel rooms change?

A: GST rates are determined by the GST Council and may change based on council meetings and government notifications.

Q: How does GST impact the overall hotel bill?

A: The GST rates are applied to the room tariff portion of your bill; additional services may attract different GST rates as per their classification.