GST on hotel rooms in 2026 — 5% or 18%, and how to tell which
Since 22 September 2025, GST on a hotel, homestay or guesthouse room is 5% when the price you actually charge for that room for that night is ₹7,500 or less, with no input tax credit. Above ₹7,500 it is 18%. The test runs per room, per night, so one stay can mix both rates.
Key takeaway: look at one room on one night. Add up everything you charge for that room that night (the room, an extra bed, an extra guest) after any discount. ₹7,500 or less: 5%. More than ₹7,500: 18%. Then do the same for the next night. If you are not registered for GST, you charge none at all on your direct bookings.
TL;DR
- • Up to ₹7,500 a night: 5%, no input tax credit (it was 12% before 22 September 2025).
- • Above ₹7,500 a night: 18%, with input tax credit.
- • The price charged decides: per room, per night, after discounts, extra beds included.
- • Register above ₹20 lakh a year (₹10 lakh in four north-eastern states).
- • Platform bookings: below the threshold, the platform may pay the GST (Section 9(5)).
- • Food: 5% in most places; 18% in hotels that charged above ₹7,500 a night last year.
The two slabs, and where they come from
The rule is in Notification No. 15/2025-Central Tax (Rate), dated 17 September 2025 and in force from 22 September 2025. It moved hotel accommodation with a value of supply “less than or equal to seven thousand five hundred rupees per unit per day” from 12% to 5%, on condition that no input tax credit is taken. Rooms above the line stayed at 18%.
| Price charged per room per night | GST | Split on the bill | Input tax credit |
|---|---|---|---|
| Up to and including ₹7,500 | 5% | 2.5% CGST + 2.5% SGST | Not allowed |
| Above ₹7,500 | 18% | 9% CGST + 9% SGST | Allowed |
Why CGST and SGST, even for a guest from another state? Because a room is taxed where the property is. A Delhi family staying in your Rishikesh guesthouse still gets a bill with Uttarakhand’s CGST and SGST, not IGST. You can read the rate notifications on the CBIC GST rates page and the GST Council website.
The price you actually charge decides the slab
The slab once followed a “declared tariff”, the rack rate on a board. Today it follows the value of supply: what the guest is actually charged for that room for that night. Four things follow.
- Discounts count. A room listed at ₹9,000 that you sell for ₹7,200 is a ₹7,200 room. It is taxed at 5%.
- Every night is its own test. If your weekend price is ₹8,000 and your weekday price is ₹7,000, a Friday-and-Saturday stay has one night at 5% and one at 18%. Festival and season prices work the same way.
- Extras for that room count. Tax commentary on the GST Council’s FAQs reads an extra bed charge as part of that room’s price for the night. A ₹7,000 room with a ₹1,000 extra bed is an ₹8,000 room: 18%.
- Each room is tested alone. A family booking two ₹5,000 rooms pays ₹10,000 a night in total, but each unit is ₹5,000, so both are at 5%.
Meals bundled into the room price, such as breakfast included, are usually treated as part of the room, so the room’s rate applies to the whole amount. Meals ordered and billed separately are a different supply, covered below.
Worked examples
| Booking | Rate | GST | Guest pays |
|---|---|---|---|
| River room, 2 weeknights at ₹3,400 | 5% each night | ₹170 × 2 = ₹340 | ₹7,140 |
| Cottage, 1 night at exactly ₹7,500 | 5% | ₹375 | ₹7,875 |
| Suite, 1 night at ₹8,000 | 18% | ₹1,440 | ₹9,440 |
| Friday ₹7,000 + Saturday ₹8,000 (weekend price) | 5% Friday, 18% Saturday | ₹350 + ₹1,440 = ₹1,790 | ₹16,790 |
| ₹7,000 room + ₹1,000 extra bed, same night | 18% (₹8,000 for the room) | ₹1,440 | ₹9,440 |
| Listed at ₹9,000, you charge ₹7,200 after a discount | 5% | ₹360 | ₹7,560 |
| Two rooms at ₹5,000 each, same night | 5% (each room tested alone) | ₹250 × 2 = ₹500 | ₹10,500 |
Prices are before GST, for a GST-registered property. The extra-bed row follows the common reading of the Council’s FAQs; confirm with your CA.
Look at what happens near the line. A ₹7,500 room costs the guest ₹7,875; a ₹7,600 room costs ₹8,968. You earn ₹100 more and the guest pays ₹1,093 more. Unless the input tax credit at 18% is worth a lot to you, pricing just above ₹7,500 rarely makes sense. Run your own numbers in the free GST calculator.
Who has to register for GST
A hotel, homestay or guesthouse has to register once its aggregate turnover in a financial year crosses ₹20 lakh. In four special category states (Manipur, Mizoram, Nagaland and Tripura) the line for services is ₹10 lakh. Himachal, Uttarakhand, Sikkim, Meghalaya, Assam, Arunachal and Jammu & Kashmir use ₹20 lakh. Count all your taxable income for the year, not just direct bookings: walk-ins, phone bookings, travel platforms and meals all go into the total. How platform bookings under Section 9(5) are counted is a detail to settle with your CA.
Below the threshold you can stay unregistered: you charge no GST on direct bookings and show none on your bill. You may register voluntarily, but then you charge GST on every taxable booking and file returns. A Kerala homestay with three rooms at ₹2,500 a night and 60% occupancy earns about ₹16.4 lakh a year, under the line. Add a fourth room and it crosses.
When a travel platform pays the GST: Section 9(5)
Section 9(5) of the CGST Act lets the government make an e-commerce operator, such as an online travel agency (a booking site or app that sells your rooms for a commission), pay the GST on certain services sold through it. Accommodation is one of them, under Notification No. 17/2017-Central Tax (Rate). The catch is in its wording: the platform pays except where the person supplying the room is liable to register under section 22(1).
- Below the threshold and unregistered: the platform pays the GST on rooms booked through it. You do not need to register just because you list there.
- Above the threshold: you are liable to register, so you pay the GST on platform bookings yourself, at the same 5% or 18%.
- Registered voluntarily while below the line: this is the grey area. Ask your CA, and check the tax settings in each platform’s host dashboard.
Food: a hotel’s restaurant versus a standalone café
- Standalone restaurants and cafés: 5%, without input tax credit. Reports of the Council’s FAQs say a standalone restaurant cannot declare itself a specified premises to move to 18%.
- Restaurants in a “specified premises”: 18%, with input tax credit. Since 1 April 2025, a specified premises is one that charged above ₹7,500 a night for any room in the previous financial year, or whose owner filed a declaration to opt in.
- Every other hotel restaurant: 5%, without input tax credit. Most homestays and small hotels are here.
Notice the knock-on effect: one ₹8,000 suite sold for one night this year can make next year’s restaurant bills 18% for every diner. If you run a busy dining room, ask your CA before pricing any room above the line.
How SitesPlaced works out room GST
On a SitesPlaced stay website, you tell it once, in Venue settings, whether you are GST-registered. If you are, the booking engine prices every night of a stay separately (weekday, weekend and season prices, plus extra adult or child charges), applies 5% to each room-night at ₹7,500 or less and 18% above it, and shows the guest every room with the total for the stay including GST before the book button. The bill for each booking lists every night’s price and its GST.
If you are not registered, no GST is shown anywhere. It does the arithmetic; it does not file your returns. See it working on the live demo homestay, read how the free booking engine prices a stay, or start at the SitesPlaced Hospitality overview.
This is a plain-English guide based on the notifications and tax commentary as of October 2026, not tax advice. Before you reprice rooms, register, or decide how to treat platform bookings, check with a CA who works with hotels in your state.
Frequently asked questions
What is the GST on hotel rooms in 2026?
Since 22 September 2025, a hotel, homestay or guesthouse room charged at ₹7,500 or less per night attracts 5% GST, without input tax credit. A room charged above ₹7,500 per night attracts 18%, with input tax credit. The rule comes from Notification No. 15/2025-Central Tax (Rate), and the test is the price actually charged for each room for each night.
Is GST on a ₹2,000 room 5% or 12%?
5%. Rooms up to ₹7,500 a night were taxed at 12% until 21 September 2025. From 22 September 2025 the rate is 5%, without input tax credit. A ₹2,000 room therefore carries ₹100 of GST per night: ₹50 CGST and ₹50 SGST.
Is a room priced at exactly ₹7,500 taxed at 5% or 18%?
5%. The notification covers accommodation with a value of supply less than or equal to ₹7,500 per unit per day, so ₹7,500 itself falls in the lower slab. ₹7,501 is taxed at 18%. Some summaries word the line loosely, so if you price right at the boundary, confirm with your CA.
Do homestays have to charge GST?
Only if they are registered for GST. A homestay has to register once its total taxable income in a financial year crosses ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). Below that it can stay unregistered and must not charge GST on direct bookings. Bookings taken through an online travel platform follow a separate rule: the platform may pay GST on them.
Who pays GST on a booking made through MakeMyTrip, Booking.com or Airbnb?
Under Section 9(5) of the CGST Act, the booking platform pays the GST on rooms booked through it when the property owner is not liable to register (broadly, below the turnover threshold). If the owner is liable to register, the owner pays it. If you registered voluntarily, check with your CA how your platforms treat you.
Can a hotel charging 5% GST claim input tax credit?
Not for rooms taxed at 5%: the lower rate comes with the condition that no input tax credit is taken. Rooms above ₹7,500 a night are taxed at 18% with credit available. A property with rooms on both sides of the line has to split its credit; hand that part to your CA.
What is the GST on food in a hotel restaurant?
It depends on the hotel. A restaurant inside a 'specified premises' (a hotel that charged above ₹7,500 a night for any room in the previous financial year, or that opted in by declaration) charges 18% with input tax credit. Other hotel restaurants, and standalone restaurants and cafés, charge 5% without input tax credit. Breakfast included in the room price is usually treated as part of the room.
Does SitesPlaced add GST to room prices automatically?
Yes, if you tell it you are GST-registered. The booking engine prices every night separately, applies 5% to nights at ₹7,500 or less and 18% above, and shows the guest the total including GST before the book button. If you are not registered, no GST is shown. Your CA still files your returns.
Room GST, worked out on every booking
A website for your homestay or small hotel with a booking engine that prices each night, adds the right GST if you are registered, and shows guests the full total before they book. Free to publish, 0% commission.
