GST on Hotel Rooms ≤ Rs 7,500: 5% Rate, No ITC for Hotels or Business Travellers

• Hotel accommodation services priced at Rs 7,500 or less per unit per day are now subject to a mandatory 5% GST rate, with no option to avail Input Tax Credit (ITC).
• Suppliers must reverse ITC on inputs used for such accommodation services, treating these supplies like exempt supplies for ITC purposes.
• Recipients (including businesses) cannot claim ITC on these accommodation invoices, even if booked for business travel or in the company’s name.
• The previous option to charge 18% GST with ITC on lower-priced rooms is no longer available.
• Businesses may need to reconsider vendor selection or travel policies if reclaiming GST is important.

Source: fintua.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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