GST on Tourism & Hospitality — Hotels, Restaurants & Tour Operators
The tourism and hospitality sector — hotels, restaurants, tour operators and travel agents — has some of the most nuanced GST rules, with rates tied to room tariffs and special schemes for restaurants and tour operators. This guide explains how GST applies. (Rates are revised periodically — confirm the current position before invoicing.)
Hotels & accommodation
GST on hotel accommodation is linked to the declared room tariff / value of supply. Lower-tariff rooms attract a lower GST rate and higher-tariff rooms a higher rate, with the applicable slabs revised from time to time. Hotels charging GST on rooms can generally claim input tax credit on eligible inputs.
Restaurants
Standalone restaurants are commonly taxed at 5% without input tax credit. Restaurants located in hotels where the room tariff crosses a specified threshold are taxed at 18% with ITC. Getting the classification right affects both your rate and your ability to claim ITC.
Tour operators & travel agents
Tour operator services (packaged tours) are often taxed at a concessional rate (commonly 5% without ITC) on the package value, while a travel agent’s commission/service is taxed at the standard rate. Air-ticket booking commissions and forex/visa services have their own treatment. Because these differ by exact service, confirm the current rule.
Compliance essentials
- Correct classification of accommodation vs restaurant vs tour operator services and the right rate.
- Track ITC eligibility (many restaurant/tour supplies are without ITC).
- GST on OTA/aggregator bookings and any reverse-charge situations.
Frequently asked questions
How is GST charged on hotel rooms?
By room tariff / value of supply — lower tariffs attract a lower rate and higher tariffs a higher rate, with slabs revised periodically.
What GST rate do restaurants charge?
Standalone restaurants are commonly 5% without ITC; restaurants in higher-tariff hotels are 18% with ITC.
How are tour operators taxed under GST?
Packaged tours are often at a concessional rate (commonly 5% without ITC); a travel agent’s commission is taxed at the standard rate.
In hotels, restaurants or travel? TAXAJ handles GST classification, ITC and returns for the hospitality sector. Get GST support from TAXAJ →
Related guides: GST registration · GST returns · Input tax credit
