Clarification on GST rate applicable to guest house food sales.

906 votes

Under the current GST provisions, the applicable GST on restaurant/food services provided by a hotel or guest house depends on the tariff of the room actually supplied to the guest, not merely on the fact that the establishment has rooms in different tariff categories. Accordingly, where the guest is accommodated in a room with tariff below ₹7,500 per day (subject to the prevailing notification/threshold), food supplied to such guest would generally attract 5% GST (without ITC). Where the guest is accommodated in a room with tariff above the prescribed threshold, restaurant services would attract 18% GST with ITC, subject to the applicable notifications. Therefore, you should not continue charging a flat 18% GST on all food sales merely because your guest house has both categories of rooms. Review your billing system to ensure GST is charged based on the tariff of the room occupied by the respective guest and the latest CBIC notifications. If required, seek a written opinion from a GST professional considering your exact business model and invoicing pattern.

Advocate Madhvi Chopra LawRato

970 votes

You cannot charge 5% GST for some guests and 18% for others based on room rent. The GST rate on food depends on the status of the hotel as a whole. If your hotel falls under the 18% category, charge 18% on all food sales. Otherwise, charge 5%.

Advocate Adarsh Kumar LawRato

954 votes

No, the split by room category is incorrect. GST on food/restaurant services isn’t decided per booking or room type; it’s decided once for the whole premises for the entire year, based on whether any room was actually sold above ₹7,500/night in the preceding FY (FY 2024-25 for FY 2025-26). If yes, the whole premises charges a flat 18% on food (their current practice, which would be correct). If no, they should be charging a flat 5% on all food, not a mix.

Advocate Aashansa Ann Rajeev LawRato

572 votes

​Hi...you cannot mix the rooms or charge a single flat rate for all rooms. Each room to be taxed based on its own price. If you include food, then the calculation will be different. Also it will depend on which category the government has put the property in.

Advocate Kashu Shubhamoorty LawRato