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Indian Hotel GST Billing Guide: Slabs, SAC Codes & Invoicing (2026)

A practical, operator-focused guide for Indian hotel owners, front desk managers, and accountants on managing CGST, SGST, IGST, composite food supplies, and zero-audit penalties.

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⚡ Indian Hotel GST Rate Summary (2026)

Under current Indian GST Council regulations:
• Hotel Room Tariff up to ₹7,500/night: 5% GST (2.5% CGST + 2.5% SGST, or 5% IGST) without Input Tax Credit (ITC). SAC Code: 996311.
• Hotel Room Tariff above ₹7,500/night: 18% GST (9% CGST + 9% SGST, or 18% IGST) with full Input Tax Credit (ITC). SAC Code: 996311.
• Hotel Restaurant / In-Room Dining (Unbundled): 5% GST without Input Tax Credit (ITC) if room tariff is up to ₹7,500, or 18% with ITC if room tariff is above ₹7,500 (specified premises). SAC Code: 996331.
• Input Tax Credit (ITC) Rule: When billing room accommodation at 5% GST, the hotel cannot claim Input Tax Credit on input goods or services (including OTA commissions and amenities). Hotels operating in the 18% slab (> ₹7,500) are fully entitled to claim ITC.

1. Official GST Slabs & SAC Codes for Indian Hospitality

In India, hospitality services are classified under Chapter 99 of the Services Accounting Code (SAC). Accurate invoicing requires printing the appropriate 6-digit SAC code and applying correct CGST/SGST/IGST splits based on the guest's state of registration.

Service Category SAC Code Condition / Threshold Applicable GST Rate
Room Accommodation 996311 Tariff per room per day ≤ ₹7,500 5% (2.5% CGST + 2.5% SGST) — No ITC
Luxury Room Accommodation 996311 Tariff per room per day > ₹7,500 18% (9% CGST + 9% SGST) — With ITC
In-House Restaurant & Room Service 996331 Hotels where room tariff ≤ ₹7,500 5% (2.5% CGST + 2.5% SGST) — No ITC
In-House Restaurant & Room Service 996331 Hotels where room tariff > ₹7,500 18% (9% CGST + 9% SGST) — With ITC
Banquets & Event Halls (With Food) 996334 Mandatory catering bundle 18% (9% CGST + 9% SGST) — With ITC

2. Intra-State vs Inter-State GST Rules (CGST + SGST vs IGST)

A frequent point of confusion at hotel front desks is whether to charge CGST + SGST or IGST when an out-of-state guest checks in:

⚖️ Place of Supply Rule (Section 12(3)(b) of the IGST Act)

For immovable property services (like hotel accommodation), the Place of Supply is always the location of the hotel property.

• Unregistered Guests (B2C): Even if a guest travels from Delhi to a hotel in Jaipur (Rajasthan), the supply takes place in Rajasthan. The hotel must charge Rajasthan CGST (2.5% or 9%) + SGST (2.5% or 9%).
• Corporate Business Guests (B2B): If a company registered in Delhi provides its Delhi GSTIN for corporate booking at a Rajasthan hotel, the hotel generates a B2B invoice with Delhi state code and charges 5% or 18% IGST. (Note: Corporate ITC is available for business travel when billed under the 18% GST slab with ITC).

3. Composite Supply: How to Tax Meal Plans (CP / MAP / AP)

Hotels frequently bundle rooms with breakfast (CP - Continental Plan) or lunch/dinner (MAP - Modified American Plan). Under Section 8 of the CGST Act, bundled supplies naturally provided together are classified as a Composite Supply:

  • The Principal Supply is the room lodging (SAC 996311).
  • Therefore, the food included in the room package takes on the GST rate of the room! If the room tariff is ₹4,000 (5% slab), the bundled breakfast is taxed at 5% (without ITC). If the luxury room tariff is ₹9,000 (18% slab), the bundled breakfast is taxed at 18% (with ITC), not the standalone restaurant rate of 5%.
  • Separate In-Room Dining Orders: If the guest orders extra snacks, beverages, or midnight room service unbundled from the room package, these items are billed under SAC 996331 at 5% GST (without ITC).

4. Mandatory Invoice Elements for Indian Hotel PMS Invoices

Under Rule 46 of the CGST Rules, every hotel tax invoice generated by your Property Management System must display:

  1. Hotel Name, Address, and 15-digit GSTIN.
  2. Consecutive serial invoice number (unique for that financial year).
  3. Date of invoice generation and checkout date.
  4. Guest Name, Address, and Guest GSTIN (mandatory for B2B invoices).
  5. Room Number and SAC Code (996311).
  6. Taxable value, rate of tax, and separate breakdown of CGST, SGST, and IGST amounts.
  7. Dynamic UPI / QR Code for quick contactless guest settlement.

⚡ How Staylink PMS Automates Indian Hotel GST Compliance

Manual GST calculation is the #1 cause of tax discrepancies during CA audits. Staylink PMS includes built-in Indian hospitality tax intelligence:

  • Dynamic Tariff Slab Auto-Switching: Automatically applies 5% (without ITC) or 18% (with ITC) based on the final sold tariff per room night.
  • Single-Folio F&B Posting: Separates 5% restaurant items from room tariffs on the same final guest checkout invoice with proper SAC codes.
  • 1-Click GSTR-1 & GSTR-3B Summary: Export monthly B2B, B2C Large, and B2C Small Excel summaries formatted precisely for your chartered accountant.
  • Automated 6:00 AM Owner WhatsApp Flash: Delivers daily taxable revenue and collected CGST/SGST directly to the hotel owner's WhatsApp every morning.
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5. Frequently Asked Hotel GST Questions

Is GST applicable on room cancellation charges?

Yes. Retaining cancellation fees or no-show charges is considered a supply of service (agreeing to tolerate an act) and attracts GST at the same rate as the underlying accommodation (5% or 18%).

Can a small hotel register under the GST Composition Scheme?

Standalone restaurants can opt for the 5% composition scheme. However, hotels providing room accommodation are generally not eligible for the composition scheme if they engage in interstate supply or accept bookings via electronic commerce operators (OTAs like MakeMyTrip or Booking.com). Regular registration is recommended.

How does OTA commission GST work with MakeMyTrip and Agoda?

When an OTA deducts 15%–20% commission, they charge 18% GST on that commission fee and provide a tax invoice to the hotel. Important ITC Distinction: If your hotel operates under the 5% room GST slab (rooms ≤ ₹7,500), input tax credit on OTA commission cannot be claimed under GST rules. If your hotel operates under the 18% room GST slab (rooms > ₹7,500), you can claim 100% ITC on OTA commission GST via regular GSTR-3B filings.