If a hotel charges more than ₹7,500 per night for a room at any point in any financial year, their restaurants will attract 18 per cent GST from the next financial year, said CBIC. This applies to all restaurant services within the hotel, and they can claim back the input tax credit. These hotels will be considered ‘specified premises’ for the next fiscal.
From 1 April, 2025, the taxability of such restaurants which operate inside hotels will be on the basis of transactional value of supply. This would replace ‘declared tariff’ which included charges for all amenities provided on rent in the unit of accommodation like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.
“For the period starting from 1 April, 2025, the value of supply of hotel accommodation in the previous FY, i.e., the transaction value charged for the said supply, would be the basis for determining whether the premises providing hotel accommodation service mandatorily falls under the category of ‘specified premises’ or not in the current FY,” CBIC said.
The CBIC has defined ‘specified premises’ as those premises from where the supplier has provided in the preceding financial year, ‘hotel accommodation’ service having the value of supply of any unit of accommodation above ₹7,500 per unit per day or equivalent.
