Hotel GST: 18% GST in hotel restaurants from April 2025, will the food bill increase? Know the details here

Hotel GST: If you often go to a hotel and eat, then from April 1, 2025, your pocket may be affected. Under the new rule of the government, now the restaurants of hotels coming in the specified premises will have to charge 18% GST from the customers, which was only 5% earlier

Hotel GST: If you often go to a hotel and eat, then from April 1, 2025, your pocket may be affected. Under the new rule of the government, now the restaurants of hotels coming in specified premises will have to charge 18% GST from the customers, which was only 5% earlier.

What is Specified Premises?

According to the government, any hotel in which the rent of any room in the last financial year was more than Rs 7,500 per day, will be considered as specified premises. Apart from this, if the hotel has declared itself in this category, it will also be counted in it. Restaurants of such hotels will now have to compulsorily charge 18% GST, in which they will get the benefit of Input Tax Credit (ITC).

Will it affect customers?

Experts say that due to 18% GST, customers may have to pay more, but it is not necessary that food becomes expensive every time. If the hotel already has to pay up to 12% GST on raw materials and services, then now it can reduce GST by taking advantage of ITC.

However, if the hotel has common ITC i.e. goods and services which are used in both hotel and restaurant like soap, water, cleaning etc., the quantity is more, then the hotel will benefit and it will not transfer this tax to the customers.

Who will get the facility of 5% GST?

Those hotel restaurants which do not fall under the definition of specified premises will have the option to continue with 5% GST without ITC or take advantage of ITC with 18%.

Business events will get expensive

Food and drinks at corporate events, meetings and conferences held in hotels can now get expensive. If the rent of just one room is more than Rs 7,500, the entire hotel will be considered as specified premises, due to which 18% tax will be applicable on restaurants as well. Hotel owners can now decide wisely which property they want to keep in specified premises and which not. This has also made the tax responsibility clear on restaurants providing services through e-commerce (such as Zomato, Swiggy).

The new GST rule has brought a dual tax system for hotel restaurants—specified premises with 18% GST and the rest of the hotels with 5%. It will be important for the customer to understand the tax rate before eating at the hotel. At the same time, hotels will have to re-fix their prices, packages and ITC strategy so that there is no extra burden on the customers.

The post Hotel GST: 18% GST in hotel restaurants from April 2025, will the food bill increase? Know the details here first appeared on informalnewz.

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