GST on hotel rooms — what companies pay, and what they can claim back
Since 22 September 2025, hotel rooms in India fall into three GST slabs. The slab decides whether your company can claim input tax credit — and it can make a slightly pricier room the cheaper one.
The three slabs, in one line each
- Up to ₹1,000 a night: no GST.
- ₹1,001 to ₹7,500 a night: 5% GST, and no input tax credit — not for the hotel, and not for your company.
- Above ₹7,500 a night: 18% GST, and GST-registered businesses can claim it back as input tax credit (ITC).
The old 12% slab was removed from 22 September 2025, after the 56th GST Council meeting. The 5% rate is mandatory for rooms up to ₹7,500: a hotel cannot opt to charge 18% on those rooms so that you can claim credit.
The slab is set per room, per night, on the actual price
Two details catch finance teams out:
- It’s the actual amount charged, not the published rate. A room with a ₹10,000 rack rate sold at ₹6,999 is in the 5% slab.
- It’s per room. The same hotel can charge 5% on a standard room and 18% on a suite on the same invoice.
What this means for companies
If your company is GST-registered and the stay is for business, the ₹7,500 line changes the maths.
| Room rate (before tax) | GST | Invoice total | ITC you can claim | Net cost to company |
|---|---|---|---|---|
| ₹7,000 | 5% = ₹350 | ₹7,350 | ₹0 | ₹7,350 |
| ₹7,500 | 5% = ₹375 | ₹7,875 | ₹0 | ₹7,875 |
| ₹7,800 | 18% = ₹1,404 | ₹9,204 | ₹1,404 | ₹7,800 |
| ₹9,000 | 18% = ₹1,620 | ₹10,620 | ₹1,620 | ₹9,000 |
The counter-intuitive result: rooms priced between ₹7,501 and roughly ₹7,875 cost a GST-registered company less than a ₹7,500 room, because the GST comes back. Two cautions: you pay the full GST upfront and claim it later, so there’s a cash-flow gap; and the credit only helps if your company can actually use it.
Getting the invoice right
Most lost ITC on hotel stays isn’t a tax problem — it’s a paperwork problem. The invoice needs:
- your company’s legal name and GSTIN (not just the employee’s name),
- the hotel’s GSTIN, the room charge and the GST charged,
- a business purpose for the stay, which your records should support.
Hotel accommodation is taxed in the state where the hotel is, so an out-of-state stay carries that state’s CGST and SGST. Your CA can confirm how your registrations handle it.
Try the numbers
Use the calculator below with a real quote. It shows the slab, the GST, and — for GST-registered companies — what the stay really costs after credit.
Slab applies per room, per night, on the actual amount charged. ITC also needs a valid invoice with your company’s GSTIN and a genuine business purpose. This is a guide, not tax advice — confirm with your CA.
Last reviewed: 22 September 2026
Rooms charged up to ₹1,000 a night are exempt. Rooms from ₹1,001 to ₹7,500 attract 5% GST without input tax credit. Rooms above ₹7,500 attract 18% GST, and GST-registered businesses can claim input tax credit on it. These rates apply from 22 September 2025.
No. The 5% slab for rooms up to ₹7,500 does not allow input tax credit, even when the stay is for business and the invoice is in your company's name. Hotels also cannot choose to charge 18% on these rooms to pass on credit.
On the actual amount charged for the room per night (the value of supply), not the published or 'rack' rate. A room listed at ₹10,000 but sold to you at ₹6,999 falls in the 5% slab.
A ₹7,500 room costs ₹7,875 with 5% GST, and none of that GST comes back. A ₹7,800 room costs ₹9,204 with 18% GST, but your company can claim the ₹1,404 back as input tax credit, so the net cost is ₹7,800. For GST-registered companies, rooms priced just above ₹7,500 (up to about ₹7,875) often work out cheaper — as long as you can use the credit.
Hotel accommodation is taxed where the hotel is. A Mumbai company staying at a Bengaluru hotel is charged Karnataka CGST and SGST. Whether your company can use that credit depends on its GST registrations — check with your CA.
Your company's legal name and GSTIN, the hotel's GSTIN, the room charge, the GST amount, and the SAC for accommodation. Ask for this before check-in — getting an invoice corrected after checkout is slow. When you book with Samyati, we take your company name and GSTIN at booking so the invoice is issued correctly first time.
Tell us what you need. We’ll handle the rest.
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