From April 1, 2025, an 18% GST will be levied on restaurant services in premium hotels with room tariffs exceeding ₹7,500. According to the CBIC, this tax will include Input Tax Credit (ITC) benefits.
Restaurant GST Rates: An 18% GST will be applicable on restaurant services in premium hotels with room tariffs exceeding ₹7,500 from April 1, 2025. The Central Board of Indirect Taxes and Customs (CBIC) has clarified that this tax will be levied with the benefit of Input Tax Credit (ITC). This decision will result in higher expenses for those dining in premium hotels.
What is the new GST rule?
Under the new framework, hotels where the room tariff for a single night exceeded ₹7,500 in the previous financial year will be considered "Specified Premises". Restaurant services in such hotels will attract an 18% GST, while the rate will remain at 5% for other hotels.
Hotels can self-designate as "Specified Premises"
Hotel owners can voluntarily declare their property as "Specified Premises". This replaces the previous 'declared tariff' system, which considered all amenities offered within the hotel room.
Separate rules for hotel groups
If multiple hotels are operated under a single GST registration, each hotel will be evaluated individually. The 18% GST will only apply to hotels where the room tariff exceeded ₹7,500 per night in the previous financial year or those designated as "Specified Premises".
