A clarification has been sought from the GST Council with regard to the Rate of GST on Hotel Accommodation. In this matter the government has changed the Terminology used earlier in the Tax Rate Schedule updated till 03rd July, 2017 and now the term ‘Declared Room Tariff’ has been replaced at all places where earlier they have used the Terms as ‘Room Tariff’ and ‘Room Rent’. This can be verified at the following Link.

 Some Frequently asked questions and their answers.

Will GST be charged on actual tariff or declared tariff for accommodation services?

Declared or published Tariff is relevant only for determining of the Tax Rate Slab. GST will be payable on actual amount charged (transaction value).

What will be the GST rate if cost goes up (more than declared tariff) owing to additional bed?

GST Rate would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs. 7000/- per unit per day but the amount charged from the customer on account of extra bed Rs. 8000/-. GST Shall be charged @ 18% on Rs. 8000/-.

Where will the declared tariff be published?

Tariff declared anywhere, say on the website through which business is being procured or printed on tariff card or displayed at the reception will be declared tariff. In case different tariff is declared at different places, highest of such declared tariff shall be the declared tariff for the purpose of levy of GST.

Same room may have different room tariff at different times depending on season or flow of tourist as per dynamic pricing. Which rate to be used then?

In case of different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply.

If Tariff Changes between booking and actual usage, which rate will be used?

Declared Tariff at the time of supply of the service would apply.

GST at what rate would be levied if an upgrade is provided to the customers as a lower rate?

If declared tariff of the accommodation provided by way of upgrade is Rs. 10000/-, but the amount charged is Rs. 7000/-, then GST would be levied @ 28% on Rs. 7000/-.

Applicable GST Tax Rate

Renting of hotels, inns, guest houses, clubs, campsites or other commercial place

SI. No Room Tariff Per Day Rate of Tax

1 Less INR 1,000 0%

2 Between INR 1000 but less than 2500 12% With Full ITC

3 Between INR 2500 but less than 7500 18% With Full ITC

4 INR 7500 or above 28% With Full ITC