Hotel Meals to Attract 18% GST Above Certain Room Rent
If you are planning to dine out, get ready to pay more. From April 1, 2025, all hotels that fall under the definition of ‘specified premises’ will charge an 18% GST (goods and services tax) from customers dining in their hotel’s restaurants. And hotels that do not meet the criteria for ‘specified premises’ can choose either to charge an 18% GST or continue with the 5% GST on restaurant bills for customers, according to a recent government circular. If the hotel opts for an 18% GST, consumers will need to pay a higher amount. However, hotels can mitigate the additional costs for customers by engaging in careful planning and consideration.
Read below to know more about the consumers who will be impacted by this new definition and how hoteliers can minimise this impact.
What is the new definition of specified premises?
According to a circular dated March 27, 2025, here’s what the government said: With effect from April 1, 2025, “Specified premises,” for a financial year, means:
- A 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 seven thousand five hundred rupees per unit per day or equivalent; or
- A premises for which a registered person supplying ‘hotel accommodation’ service has filed a declaration, on or after the 1st of January and not later than the 31st of March of the preceding financial year, declaring the said premises to be specified premises; or
- A premises for which a person applying for registration has filed a declaration, within fifteen days of obtaining acknowledgement for the registration application, declaring the said premises to be specified premises
“As per the above definition, a premises from which ‘hotel accommodation’ services, having the value of supply of any unit of accommodation more than Rs. 7,500 per unit per day or equivalent, have been supplied in a financial year, becomes a ‘specified premises’ for the subsequent financial year,” said the Central Board of Indirect Taxes and Customs (CBIC).
