27/12/2024
The GST Council's 55th meeting has brought significant changes to the taxation framework for hotel accommodations and restaurant services. The key modification is linking GST rates to the actual value of supply, providing flexibility to hotels and restaurants in determining their applicable tax structure .
*Hotel Accommodations:*
- GST rates will be linked to the actual value of supply.
- A new definition of "specified premises" will be introduced, omitting the concept of "declared tariff."
- The GST rate applicable will depend on the value of supply of any unit of accommodation provided by the hotel.
*Restaurant Services:*
- GST rates will be linked to the actual value of supply.
- Hotels can opt to pay tax on restaurant services at 18% with Input Tax Credit (ITC), even if the value of supply is below ₹7,500.
These changes aim to simplify the taxation framework and provide more flexibility to hotels and restaurants. The modifications will come into effect from April 1, 2025, to avoid any transition difficulties.
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