Hotel GST Billing & Invoice Guide 2026

Running a hotel means managing many moving parts: reservations, housekeeping, dining. But one part often trips hotels up: GST compliance, especially invoice generation and billing.

Hotel room GST depends on the value charged per room per day, not on the total bill. Food, laundry and other services billed separately are taxed at their own rates, and the rate you charge on rooms also decides whether you can claim input tax credit.

This guide covers the GST framework for hotels in 2026: rates, what goes on the invoice, multi-day stays, ITC, and GSTR filing.

Looking for expert help with hotel GST, GST rates for hotels, hotel GST invoice, hotel billing, GSTR-1 filing hotels, hotel GST compliance? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.

Hotel GST Rates 2026

GST 2.0 took effect on 22 September 2025. Hotel accommodation (SAC 996311) is now taxed as follows, under Notification No. 11/2017-Central Tax (Rate) as amended:

Before 22 September 2025 the rate was 12% up to Rs 7,500 and 18% above it. The old exemption for rooms up to Rs 1,000 was withdrawn from 18 July 2022.

Examples

Example 1: Rs 5,000 per night

• Rate: 5% (up to Rs 7,500)
• GST: Rs 5,000 x 5% = Rs 250
• Guest pays: Rs 5,250 per night

Example 2: Rs 15,000 per night

• Rate: 18% (above Rs 7,500)
• GST: Rs 15,000 x 18% = Rs 2,700
• Guest pays: Rs 17,700 per night

Example 3: Rs 7,500 per night after a festive discount from Rs 9,000

• The rate follows the actual value charged, Rs 7,500, so 5% applies
• GST: Rs 375; guest pays Rs 7,875

What Decides the Rate

A specified premises is a hotel where the value of supply of any room was above Rs 7,500 per unit per day in the previous financial year, or a hotel that opts in by declaration. From 1 April 2025 (Notification No. 05/2025-Central Tax (Rate)), this test uses the actual value charged instead of the old "declared tariff", and hotels opt in or out through a declaration on the GST portal. Restaurant service in a specified premises is taxed at 18% with ITC; elsewhere it is 5% without ITC.

Hotel GST Invoice: Mandatory Details

Under Rule 46 of the CGST Rules, a tax invoice must include:

Since the place of supply for accommodation is the hotel's location, a guest from another state is still charged CGST + SGST.

Hotel GST Invoice Format: Example

A hotel in Telangana charging Rs 5,000 per night (5% without ITC) with a separate restaurant bill:

TAX INVOICE

Hotel: [Hotel name] | GSTIN: [15-digit GSTIN] | State: Telangana (36)
Invoice No.: HIN-2026-0851 | Date: 25-Aug-2026
Guest: [Name, address] | Guest GSTIN: [if registered]
Place of supply: Telangana (36)

S.No | Description           | SAC    | Qty | Rate  | Taxable | GST% | CGST | SGST | Total
1    | Room, Room 305        | 996311 | 2   | 5,000 | 10,000  | 5%   | 250  | 250  | 10,500
2    | Restaurant (in-room)  | 996331 | 1   | 2,000 | 2,000   | 5%   | 50   | 50   | 2,100

Taxable value: Rs 12,000
CGST: Rs 300 | SGST: Rs 300
Grand total: Rs 12,600

Multi-Day Stays

You can issue one invoice at checkout for a multi-night stay. The rate is decided per room per day, so a stay at Rs 8,000 a night is taxed at 18% for every night:

If the per-night charge changes during the stay (for example, a weekend rate), apply the rate for each day's value separately.

Hotel GST Input Tax Credit (ITC)

Rooms at Rs 7,500 or less (5%): no ITC on the goods and services used to supply that accommodation. A hotel with rooms in both brackets must apportion common credits under Rules 42 and 43.

Rooms above Rs 7,500 (18%): ITC is available on goods and services used in the business, such as linen, furniture, kitchen equipment, repairs, housekeeping supplies and professional services, subject to Section 16 conditions and GSTR-2B.

Always blocked (Section 17(5)): motor vehicles for passenger transport (except specified uses), food and beverages for staff, club memberships, goods for personal use, and construction of immovable property on own account.

Electricity is exempt from GST, so there is no credit on power bills.

ITC Example (hotel charging 18% on all rooms)

Check the current rate on each supplier's invoice; the rates above are illustrative for the categories named.

GSTR-1 and GSTR-3B for Hotels

Monthly filers file GSTR-1 by the 11th and GSTR-3B by the 20th of the following month. A hotel with aggregate turnover up to Rs 5 crore can opt for QRMP and file quarterly while paying tax monthly.

Example Month (hotel charging 18% on rooms)

Report B2B invoices individually in GSTR-1 so the guests' companies see them in GSTR-2B. In GSTR-3B, set off the Rs 18,000 ITC from the example above, leaving Rs 2,16,000 to be paid in cash by the due date.

Common Hotel GST Errors

Where Tax Garden Helps

Tax Garden's GST filing team helps hotels with:

• Applying the correct rate for each room-day and each service
• GST-compliant invoice formats
• GSTR-1 and GSTR-3B filing
• ITC tracking and reconciliation with GSTR-2B

Looking for expert help with hotel GST, GST rates for hotels, hotel GST invoice, hotel billing, GSTR-1 filing hotels, hotel GST compliance? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.

Hotel GST: Frequently Asked Questions

What is the GST rate on hotel rooms in 2026?

Since GST 2.0 took effect on 22 September 2025, hotel accommodation priced up to Rs 7,500 per room per day is taxed at 5% without input tax credit, and accommodation above Rs 7,500 per room per day is taxed at 18% with input tax credit. The old 12% slab no longer applies to hotel rooms.

Which amount decides whether a room falls in the 5% or 18% bracket?

The rate depends on the actual value charged for one unit of accommodation per day, after any discount and before GST, not on the published or declared tariff. Charges billed separately for food, laundry or other services are not added to the room value when deciding the rate, but each of those services is taxed at its own rate.

Can a hotel charging 5% GST on rooms claim input tax credit?

No. The 5% rate on rooms up to Rs 7,500 per day comes with the condition that no input tax credit is taken on the goods and services used to supply that accommodation. A hotel with rooms above Rs 7,500 pays 18% and can claim ITC on eligible purchases, except blocked credits under Section 17(5) such as most motor vehicles.

What GST applies to the restaurant inside a hotel?

Restaurant service is taxed at 5% without ITC, unless the hotel is a specified premises, which broadly means it charged more than Rs 7,500 per unit per day for any room in the previous financial year, or opted in by declaration. In a specified premises, restaurant service is taxed at 18% with ITC.

Is GST payable on booking advances and cancellation charges?

Yes. For services, GST becomes payable when an advance is received, so the hotel pays tax on booking deposits in the month of receipt and adjusts it against the final invoice. Cancellation or retention charges kept when a guest cancels are treated as consideration and taxed at the same rate as the room booking they relate to.

What are the GSTR-1 and GSTR-3B deadlines for a hotel?

A monthly filer files GSTR-1 by the 11th and GSTR-3B by the 20th of the following month. A hotel with turnover up to Rs 5 crore can opt for the QRMP scheme and file both returns quarterly while paying tax monthly. Late GSTR-3B filing costs Rs 50 per day (Rs 20 for nil returns) plus 18% annual interest on tax paid late.

What SAC code should a hotel use for room charges?

Room accommodation provided by hotels, inns and guest houses falls under SAC 996311. Use this code for room charges on the invoice and in the HSN summary of GSTR-1, and use the relevant restaurant or other service codes for food and add-on services billed on the same invoice.

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Sources: Notification No. 11/2017-Central Tax (Rate) as amended, including by Notification No. 05/2025-Central Tax (Rate) (specified premises from 1 April 2025); 56th GST Council recommendations (GST 2.0, effective 22 September 2025); CBIC Circular No. 178/10/2022-GST (cancellation charges); CGST Act Sections 13, 16, 17(5) and 50; CGST Rules 42, 43 and 46; IGST Act Section 12(3). Verify current rules on cbic-gst.gov.in and gst.gov.in before implementing, as rates and rules may change. This article is general information on hotel GST compliance and not a substitute for professional advice.