5-star hotels with tariff under Rs 7,500 to attract 18% GST

Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST: Ministry

Hotels, including those with 5- star rating, will attract GST rate of 18 per cent for room tariffs of less than Rs 7,500, the government clarified on Tuesday.

As per the rate structure decided by the GST Council, hotels, guest houses and clubs having room tariff of Rs 1,000 and above but less than Rs 2,500 per room per day will attract 12 per cent tax rate.

In cases where the room tariff is Rs 2,500 and above but less than Rs 7,500 per room per day, a 18 per cent GST would be charged.

The ministry said in a statement that it has received reports wherein doubts have been expressed whether 5-star hotels are liable to pay GST at 28 per cent irrespective of the declared tariff of a unit of accommodation.

"It is hereby clarified that accommodation in any hotel, including 5-star hotels, having a declared tariff of a unit of accommodation of less than Rs 7,500 per unit per day, will attract GST at 18 per cent. Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST," the ministry said.

The Goods and Services Tax (GST) has been implemented from July 1.