If you too often go to a hotel or restaurant and eat food, then this news can prove to be your work. If you go to eat food in a restaurant, then you have to give different GST on different food items. For example, if you only eat food, 5% GST will be charged, but if you order ice cream after eating, it will have to pay 18% GST.

Not only this, separate taxes are also imposed on bread and paratha. If a customer eats a bread and two parathas, then the shopkeeper will have to do a blessing while making the bill, and the customer will be surprised to see the bill. Apart from this, if a restaurant has the status of AC restaurant, then all the food items will be charged 18% GST. All these rules create confusion about the GST on hotels and restaurants. In such a situation, CBIC has made it clear when GST will be installed.

When will GST look?

In fact, the Central Board of Customs and Customs (CBIC) recently said that the hotel fare at any time in the financial year will be considered as a specified campus for the next financial year and the restaurant services provided inside such complexes will cost 18 percent GST with input tax credit.

Since April 1, 2025, restaurants that operate inside hotels will be based on the value (transaction price) of their taxisitivation supply. This will replace the announced fee. The CBIC has said in the often asked questions (FAQs) on the subject of restaurant service supplied in the specified premises, for the period starting from April 1, 2025, the price of the supply of hotel housing supply in the last financial year, ie the transaction price taken for the said supply, will be the basis for determining whether the hotel housing service providing the complex in the current financial year or not.

What is the rule about the hotel?

The CBIC has defined the specified campus as a complex from where the supplier has served to stay in the hotel in the last financial year and the supply of any unit of housing is Rs 7,500 per unit per day or more.
Restaurant services inside such hotels will automatically levy 18 percent GST with input tax credit (ITC).
Restaurant services inside hotels whose room fare has not exceeded Rs 7,500 per day in the last financial year, will remain five percent GST without ITC.

Opt in may be announced

Also, the hotel which plans to recover more than Rs 7,500 from the next financial year from the next financial year, can announce the involvement in the system between January 1 and March 31 of the current financial year. Also, hotels seeking new registration will have to declare the said campus as a specified campus and give information about adopting this system within 15 days of receiving it.

GST will be decided like this

CBIC has told that now the rules of declaring a hotel as a 'special place' are being changed. Earlier this decision was made on the basis of the 'declared fare' of the hotel, but now this rule will be based on the 'real earning' of the hotel. This change needed because now most of the hotels keep paying more or more as per their demand. Apart from this, CBIC has also provided an additional facility to hotel operators. Under the new rule, the hotel owners can declare their hotel a 'special place' if they want to do their earnings.

The biggest advantage of this will be that restaurants inside such hotels will be able to take full advantage of the input tax credit (ITC) by applying 18% GST on their services. This will give more benefits to the hotel industry.

18 percent GST with ITC

EY Tax Partner Saurabh Aggarwal said that to simplify compliance, CBIC has often issued questions asked. Through this, it has been clarified that if the price of hotel housing in the last financial year is more than Rs 7,500 per day, then the campus will be subject to 18 percent GST with ITC. If the price does not exceed Rs 7,500 in the previous financial year, hotels can voluntarily opt for complex classification, the announcement will remain valid until they choose to get out of it.
Aggarwal said, this system will eliminate the requirement of annual filing. Different announcements are required for each campus and for restaurants located outside the specified complex, the GST rate without ITC is five percent.