18% GST for High-Value Hotel Restaurant Services

From April 1, 2025, hotels charging above Rs 7,500 per day will be classified as 'specified premises', attracting 18% GST. The tax is based on the transaction value of supply. Hotels charging less will remain at 5% GST. The CBIC aims for simplified compliance and dynamic pricing adaptation.

Starting April 1, 2025, hotels that charge over Rs 7,500 a day will be identified as 'specified premises', subject to an 18% GST rate for restaurant services within these premises, according to a CBIC announcement.

The CBIC noted this shift aligns with the industry's move toward dynamic pricing, transitioning from 'declared tariff' to 'transactional value' for defining specified premises. The transaction value charged in the previous financial year will determine current fiscal applicability.

Hotels aiming to exceed the Rs 7,500 threshold must opt-in by filing a declaration between January 1 and March 31. The change assures compliance simplification, allowing streamlined classification for hotels and consistent taxation insights for business planning.

(With inputs from agencies.)