Looking for expert help with Income tax and GST for function hall and marriage hall owners India? 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.
Key Takeaways
- Renting the hall alone is 18% GST. Hall plus catering sold as one package is 5% with no input tax credit (Notification 11/2017-Central Tax (Rate), S. No. 16(iii) and 7(v)).
- GST on a booking advance is due in the month you receive it, not the month of the wedding (Section 13(2), CGST Act).
- Cash of Rs 2 lakh or more for one wedding or event breaks Section 269ST, even if it comes in parts. The penalty equals the amount received.
- Business clients deduct TDS under Section 194-I when hall rent crosses Rs 50,000 in a month (from 1 April 2025).
- Individual, HUF and partnership owners with turnover up to Rs 2 crore (Rs 3 crore if cash is within 5%) can use Section 44AD.
What is the GST rate on a function hall in India? Renting a function hall or marriage hall without food is 18% GST under heading 9972 (real estate services). If you supply catering together with the hall as one package, the package is 5% GST without input tax credit, unless your premises is a "specified premises" (Notification 11/2017-Central Tax (Rate), S. No. 7(v), 16(iii)).
A function hall earns most of its money in a few wedding seasons, takes advances months ahead, and deals with families who often want to pay in cash. Each of those habits has a tax rule attached. This guide covers the two GST rates you'll charge, GST on advances, the cash limit, TDS from corporate clients and how your income is taxed for AY 2026-27 (FY 2025-26). If you also run outdoor catering, read our caterers guide too.
Which GST rate applies to each type of booking?
The rate depends on what you sell, not on the occasion. A wedding, a birthday and a corporate meeting are all taxed the same way.
Comparison
GST on Function Hall Bookings (from 22 September 2025)
| What you supply | GST rate | Input tax credit |
|---|---|---|
| Hall only; client brings their own caterer | 18% (9% CGST + 9% SGST) | Yes |
| Hall plus catering as one package, premises not a specified premises | 5% (2.5% CGST + 2.5% SGST) | No |
| Hall plus catering as one package at a specified premises (hotel rooms above Rs 7,500 a day last year, or opted in) | 18% | Yes |
| Catering alone at a client's venue, by a hall that is not a specified premises | 5% | No |
Source: Notification 11/2017-Central Tax (Rate): S. No. 16(iii) heading 9972; S. No. 7(iv) and 7(v) heading 9963; 'specified premises' as substituted by Notification 05/2025-Central Tax (Rate) from 1 April 2025
Here's how that looks on two bills:
- Hall only, Rs 1,50,000. GST at 18% is Rs 27,000 (CGST Rs 13,500, SGST Rs 13,500). The client pays Rs 1,77,000.
- Hall plus dinner for 400 guests, one package of Rs 5,00,000. GST at 5% is Rs 25,000 (CGST Rs 12,500, SGST Rs 12,500). The client pays Rs 5,25,000.
The 5% package rate comes with a condition: you can't claim input tax credit (ITC) on goods and services used to supply it. If you also take hall-only bookings at 18%, split your common credit, such as GST on AC servicing or generator repairs, between the two, and claim only the part that belongs to the 18% bookings (Rule 42, CGST Rules).
Can you pick 18% with ITC on a package because your purchases are large? Not unless your hall is a "specified premises". From 1 April 2025, that means a premises where you supplied hotel rooms above Rs 7,500 per unit per day in the previous financial year, or one you declared as specified premises in Annexure VII between 1 January and 31 March of the previous year (Notification 05/2025-Central Tax (Rate)). A hall with no rooms that hasn't filed that declaration stays at 5%.
When do you need GST registration?
You must register once your aggregate turnover in a financial year crosses Rs 20 lakh (Rs 10 lakh in special category states), under Section 22 of the CGST Act. A hall that does 15 bookings of Rs 1,50,000 has already reached Rs 22.5 lakh. Our GST registration service can get you set up before the season starts.
If you lease the hall building rather than own it, check your landlord's status. Since 10 October 2024, a regular GST-registered tenant pays 18% GST under reverse charge on rent for a non-residential property taken from an unregistered landlord (entry 5AB, Notification 13/2017-Central Tax (Rate)). From 16 January 2025, composition taxpayers are excluded (Notification 07/2025-Central Tax (Rate)). Our GST on rent guide explains the reverse charge entries.
Do you pay GST on booking advances?
Yes. Under Section 13(2) of the CGST Act, the time of supply of a service is the earlier of the invoice date or the date you receive payment. Say a family pays Rs 1,00,000 in March to book your hall for a June wedding package. That Rs 1,00,000 already includes GST at 5%, so GST of Rs 4,762 (Rs 1,00,000 x 5/105) goes into March's GSTR-3B. Issue a receipt voucher when you take the advance, and adjust it in the final invoice after the event.
Step-by-Step Guide
GST Steps for One Wedding Booking
Take the advance and issue a receipt voucher
Note whether the booking is hall only (18%) or a hall-plus-catering package (5%). GST on the advance is due in that month's GSTR-3B.
Report the advance in GSTR-1
Show advances received in the month in GSTR-1 so your return matches GSTR-3B.
Issue the final tax invoice after the event
Charge GST on the full value and adjust the tax already paid on the advance.
Refund cancelled bookings with a refund voucher
If a booking is cancelled and you return the advance, issue a refund voucher. Your cancellation policy decides how much you keep.
Keep catering and hall-only ITC apart
Claim ITC only on inputs used for 18% bookings. Credit linked to 5% packages can't be taken.
Source: Section 13(2), CGST Act 2017; Notification 11/2017-Central Tax (Rate), S. No. 7(v)
How much cash can you accept for one wedding?
Less than Rs 2 lakh per event. Section 269ST of the Income-tax Act bars receiving Rs 2 lakh or more in cash from a person in a day, for a single transaction, or for transactions relating to one event or occasion. The penalty under Section 271DA equals the amount received.
Take the Rs 5,25,000 package above. If the family pays Rs 1,50,000 in cash in March and Rs 1,50,000 in cash in June, the total cash for that one wedding is Rs 3,00,000. Both receipts count, and the penalty could be Rs 3,00,000. Ask for the balance by bank transfer, UPI or cheque. Our cash transaction limits guide covers the related rules.
Your own cash payments matter too. If you keep books, any expense above Rs 10,000 paid in cash to one person in a day, say to a decorator or tent supplier, is disallowed under Section 40A(3).
Will your clients deduct TDS?
Corporate clients and firms often will. Under Section 194-I, any payer other than an individual or HUF deducts TDS on rent above Rs 50,000 for a month or part of a month. That threshold replaced the old Rs 2,40,000 yearly limit from 1 April 2025 (Finance Act 2025). Some clients treat a full catering package as a contract and deduct under Section 194C instead. Whatever section they use, the TDS shows in your Form 26AS, and you claim it as credit in your ITR. See our TDS on rent guide.
How is your hall income taxed for AY 2026-27?
When you run the hall as a business, with staff, power backup, decoration, cleaning and catering, the income is business income. If you only lease the building to someone else who runs the hall, the rent you receive is usually taxed as house property income instead. This guide covers owners who run the hall.
Step-by-Step Guide
Choosing How to Report Function Hall Income
Check Section 44AD eligibility
Resident individual, HUF or partnership firm (not an LLP). Turnover up to Rs 2 crore, or up to Rs 3 crore if cash receipts are within 5% of total receipts.
Work out deemed profit
6% of receipts by bank, UPI or cheque, and 8% of cash receipts. You may declare more.
Know the five-year lock
If you used Section 44AD and then declare a lower profit, Section 44AD(4) bars the scheme for five years, and books and an audit follow if income is above the exemption limit (Section 44AD(5), 44AB(e)).
If you keep books, check the audit limit
Tax audit under Section 44AB(a) applies above Rs 1 crore turnover, or Rs 10 crore if cash receipts and cash payments are each within 5%.
File the right form
ITR-4 for Section 44AD if total income is up to Rs 50 lakh and other conditions are met; ITR-3 if you keep full books.
Source: Sections 44AD, 44AB and 44AA, Income-tax Act 1961 (applies to FY 2025-26 / AY 2026-27)
Example (proprietor, Section 44AD, new regime): FY 2025-26 receipts excluding GST are Rs 1,50,00,000. Of this, Rs 1,44,00,000 came by bank and UPI and Rs 6,00,000 in cash (4% of receipts).
- Deemed profit: 6% of Rs 1,44,00,000 is Rs 8,64,000, plus 8% of Rs 6,00,000 is Rs 48,000. Total Rs 9,12,000.
- Tax: nil up to Rs 4 lakh, Rs 20,000 on Rs 4-8 lakh, and Rs 11,200 (10% of Rs 1,12,000) on the rest. Total Rs 31,200.
- Income is within Rs 12 lakh, so the Section 87A rebate of up to Rs 60,000 covers the full Rs 31,200. Tax payable: nil.
If the same hall took Rs 2,50,00,000 with 10% in cash, it would be outside Section 44AD (above Rs 2 crore, and cash above 5%). It would need full books and a tax audit, because turnover is above Rs 1 crore and cash is above 5%.
From FY 2026-27, the Income-tax Act 2025 replaces the 1961 Act with new section numbers. The FY 2025-26 return you're filing now still follows the 1961 Act sections above.
Common mistakes function hall owners make
- Charging 18% on every booking. A hall-plus-catering package at a premises that isn't a specified premises is 5%. Charging 18% overbills the family and mixes up your returns.
- Charging 5% on hall-only bookings. If the client brings their own caterer, you're only renting the hall, and that's 18%.
- Paying GST only after the event. Advances are taxed when received. Missing them means interest when you finally pay.
- Taking the whole wedding payment in cash. Rs 2 lakh or more in cash for one event breaks Section 269ST, however you split the dates.
- Claiming full ITC while selling 5% packages. Credit used for packages has to stay out of your claim.
How Tax Garden helps function hall owners
We set up your booking invoices so each one carries the right rate, track GST on advances, and file GSTR-1 and GSTR-3B through our GST return filing service. At year end, we prepare your ITR under Section 44AD or from your books through our ITR filing service. See pricing for plans.
