GST Rate Slab on Hotel Rooms – On Actual Tariff (Transaction Value) instead of Declared Room Tariff

Posted By on July 22, 2018

In a major relief to the Hotels and Hospitality Industry, GST Council in its 28th Meeting held on 21st July, 2018, has announced that the GST Rate Slab on Accommodation Service will apply based on Transaction Value instead of Declared Tariff.


This change can be understood by following example:-

Hotel Room with a Declared Room Tariff of Rs. 9000/- sold at a discounted value of Rs. 5000/-

Earlier – GST Rate of 28% was applied on Rs. 5000/- as the Declared Room Tariff was ‘Rs. 7500/- & above’ therefore the GST liability was Rs. 1400/-.

After Proposed Amendment – GST Rate of 18% will be applied on Rs. 5000/- as the actual Transaction Value is below Rs. 7500/- therefore the GT Liability is Rs. 900/-.


This is a major relief to the Hotel Industry and will give a big boost to the Tourism Industry.


(NOTE : This amendment proposed by the GST Council shall be effective from 27th Day of July, 2018 through a separate Gazette notification/ circular which shall have force of law.)


REFERENCE LINKĀ : Para 15 of the Press Release by Ministry of Finance, Government of India on the Decisions taken at the 28th GsT Council Meeting on 21-07-2018 –;jsessionid=CE640B0ACEDC8E9A37D6DA8D4D8B055E


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