Hotel restaurant service, room rent exceeds Rs 7,500/day landed under 18 PCs: CBIC: CBIC

New Delhi, March 27 (PTI) hotel, collect room rent above ₹CBIC said Thursday that 7,500 of the next fiscal and restaurant services offered within such venues will be considered “designated venues” any time a day, which will attract 18% of GST and receive an input tax credit.

From April 1, 2025, the tax capacity of such restaurants operated in-house will be based on the supply value (transaction value). This will replace the concept of “announced tariffs” which includes the expenses for all amenities offered in the accommodation unit (rent rent given), such as furniture, air conditioning, refrigerator or any other amenities, but does not exclude any discounts for the published charges of the unit.

“In the period starting from 01.04.2025, the value of hotel accommodation supply in the previous fiscal district, i.e., the transaction value collected by the above supply will be the basis for determining the “specific supply” catering service provided in the current FY.

CBIC defines “specified venues” as those houses provided by the supplier in the previous fiscal year, and the “hotel accommodation” service has the value of any unit accommodation above. ₹7,500 or equivalent per day.

Restaurant services in such hotel units will automatically attract 18% GST and receive an input tax credit (ITC).

The restaurant service in the hotel has not crossed ₹In the absence of ITC, 7,500/unit/day of the previous fiscal year will continue to attract 5% GST.

Also, those hotels that plan to charge ₹The next fiscal 7,500 room rentals can be filed with the GST authorities between January 1 and March 31 of the ongoing fiscal. In addition, hotels seeking new registration will have to fill out the OPT OF announcement and receive a 15-day home for the home as a “specified home”.

In the definition of designated venues, the concept of “announced tariffs” is replaced by “supply value” (i.e. transaction value), as the hospitality industry has mostly turned to a dynamic pricing model, the CBIC said.

In the current FY, establishing a “specified venue” status for providing hotel accommodation services depends on the “supply value” of the accommodation units provided in the previous fiscal year, will determine the “specified venue” status of the hotel in any fiscal year.

CBIC said it will also “provider of hotel accommodation services to declare the venue as a ‘specified venue’ so that restaurants at the above-mentioned venues can take advantage of the ITC’s restaurant service availability rate of 18%.

To simplify compliance, EY tax partner Saurabh Agarwal said CBIC has released FAQs, clarifying if hotel accommodations are worth more than ₹Prior to FY, 7,500 per day, the site will be GST with ITC content of 18%. If the value does not exceed the hotel, the hotel can voluntarily choose the designated venue classification ₹7,500 in previous FYs, the declaration is valid until they opt out.

“This simplified process eliminates the need for annual applications. Each premise requires a separate statement, and for restaurants outside designated venues, the GST rate is 5% without ITC,” Agarwal added.