Hospitality SectorTourism & Travel

GST on Hospitality & Tourism — Hotels, Restaurants, Airlines & Tour Operators

Complete GST guide for hospitality: hotels (exempt to 18% based on tariff), restaurants (uniform 5% no ITC), air transport (5%/12%), railways (exempt to 5%), tour operators (5%), food delivery platforms, cab aggregators, and event management services.

Exempt

Hotels (≤₹1000)

12%

Hotels (₹1001-₹7500)

18%

Hotels (>₹7500)

5%

Restaurants (all)

5%

Tour Operators

5%

Air (Economy)

12%

Air (Business)

5%

Railways

Hospitality & Tourism — GST Framework

Hotels & Accommodation — Slab-Based

Hotel room tariff determines GST: ≤₹1,000/night: exempt (0%). ₹1,001-₹7,500/night: 12% (with ITC). >₹7,500/night: 18% (with ITC). Rate applies on declared tariff (rack rate), not actual transaction value. From July 2022 (47th Council): rooms ≤₹1,000 but supplied through e-commerce (OYO, MakeMyTrip) attract 12%. Homestays/guest houses follow same slabs.

Restaurants — Uniform 5% (No ITC)

All standalone restaurants (AC or non-AC): 5% GST without ITC. This was simplified in November 2017 (23rd Council). Earlier: non-AC 12%, AC 18% (both with ITC). Restaurants in hotels with room tariff >₹7,500: 18% (with ITC) — they can opt for 5% without ITC. Outdoor catering: 5% without ITC (reduced from 18% in Sep 2019). Cloud kitchens: 5% (restaurant service). Food delivery apps (Swiggy/Zomato): 5% collected by platform.

Tour Operators & Travel Agents — 5%/18%

Tour operator services: 5% without ITC (on gross value) — most common choice. Alternatively: 18% with full ITC (on margin/commission). Package tours: 5% on entire package value (includes accommodation, transport, sightseeing). Inbound tours (foreign tourists): zero-rated export of service (0% with ITC). Travel agent commission: 18%. Online travel aggregators (MMT, Goibibo): 18% on commission.

Air Transport — 5%/12%

Economy class (domestic): 5% without ITC. Business class (domestic): 12% with ITC. International flights: zero-rated (0% — export of service). Charter flights: 18%. Helicopter joy rides: 5%. Air ambulance: exempt. Airport services (lounge access): 18%. Ground handling: 18%. In-flight catering: 18%. Cargo transport by air: 18%. Airlines cannot claim full ITC at 5% rate — major industry concern.

Railways & Road Transport

Rail transport (passenger): AC/First class: 5%. Sleeper/General: exempt. Metro/local: exempt. Railway catering: 5% (Indian Railway Catering — IRCTC). Cab aggregators (Ola/Uber): 5% on ride fare. Rent-a-cab: 5% without ITC or 12% with ITC. Stage carriage (bus): exempt. Contract carriage (tourist bus): 5% without ITC or 12% with ITC. Cruise ships: 5%.

Events, Convention & MICE

Convention/exhibition services: 18%. Banquet hall/mandap rental: 18%. Event management: 18%. Wedding planning: 18%. MICE (Meetings, Incentives, Conferences, Exhibitions): 18%. Venue rental: 18%. Audio/visual equipment rental: 18%. Photography/videography: 18%. Flower decoration: 5% (if goods) / 18% (if service). Tent house services: 18%.

Hospitality & Tourism — Rate Table

ServiceSACGST RateNotes
Hotel room (≤₹1,000/night)9963ExemptNot via e-commerce platform
Hotel room (₹1,001-₹7,500)996312%With ITC available
Hotel room (>₹7,500/night)996318%Luxury hotels, with ITC
Restaurant (all types)99635%Without ITC (since Nov 2017)
Outdoor catering99635%Without ITC (reduced Sep 2019)
Tour operator (package)99855%Without ITC, on gross value
Air travel — Economy99645%Without ITC
Air travel — Business996412%With ITC
Rail — AC/First class99645%Sleeper/General: exempt
Cab/taxi aggregator99645%Ola, Uber — on fare
Cruise services99645%Without ITC
Event management/MICE999518%Full rate with ITC

Frequently Asked Questions

What is the GST on hotel rooms in India?
Hotel GST depends on declared room tariff: ≤₹1,000/night = exempt (0%), ₹1,001-₹7,500/night = 12%, >₹7,500/night = 18%. From July 2022, budget rooms (≤₹1,000) booked through online platforms (OYO, MakeMyTrip, Goibibo) attract 12% even if below threshold — because e-commerce operator must collect GST. Actual transaction price (discounted rate) doesn't matter — declared tariff determines slab.
Why don't restaurants get ITC under GST?
In November 2017 (23rd Council meeting), restaurant GST was simplified: uniform 5% WITHOUT ITC (previously 12/18% WITH ITC). Reason: many restaurants were collecting 18% GST but not passing ITC benefit to consumers (anti-profiteering complaints). The 5% no-ITC model ensures: (1) lower visible tax for consumers, (2) simpler compliance for restaurants, (3) no profiteering disputes. Restaurants in luxury hotels (>₹7,500 tariff) can still opt for 18% with ITC.
How does GST work for Swiggy and Zomato?
From January 1, 2022: food delivery platforms (Swiggy, Zomato) are deemed 'suppliers' of restaurant services and must collect & pay 5% GST on delivery orders. Earlier, the restaurant was liable. This shift closed tax leakage from unregistered small restaurants using platforms. The 5% rate (no ITC) applies same as dine-in. Delivery charges by platform: additional 18% GST on delivery fee itself.
Is GST applicable on international flight tickets?
International flights departing from India are ZERO-RATED (0% GST — treated as export of service). Airlines can claim ITC on inputs. Domestic economy: 5% (no ITC). Domestic business: 12% (with ITC). For travel agents booking international flights: their commission/markup is 18% GST (service to airline or customer). Passengers don't pay GST on the international ticket itself.

Hotel & Restaurant Billing — Tariff-Based GST Automated

Laabam.One auto-applies the correct hotel slab based on declared tariff, handles restaurant no-ITC compliance, tour operator package billing, and travel agent commission GST — all with multi-location support.

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