GST Billing for Hotels in India: Complete Compliance Guide for Hoteliers

GST compliance is one of the areas where Indian hoteliers most frequently face penalties, incorrect returns, and guest billing disputes. The hotel sector has a tiered GST structure, different rules for IGST vs. SGST, specific requirements for interstate guests, and separate treatment for F&B versus accommodation. Getting this wrong does not just create accounting headaches — it creates legal exposure during GST audits.

Hotel GST Rate Slabs in India (2026)

Indian hotels are taxed under GST based on the declared tariff (or transaction value) per room per night. Properties charging below ₹1,000 per night are exempt from GST. Rooms between ₹1,001 and ₹7,500 attract 12% GST. Rooms above ₹7,500 per night attract 18% GST. F&B served in hotel restaurants where the room rate is above ₹7,500 is taxed at 18%, while standalone restaurant service follows a separate slab.

IGST vs SGST: The Interstate Guest Rule

• When a guest checks in from the same state as the hotel, SGST (State GST) and CGST (Central GST) apply — split equally
• When a guest is from a different state — for example, a Delhi businessperson staying in a Chennai hotel — IGST applies at the same total rate
• Your PMS must correctly identify guest state of residence from their GST registration number or address to apply the correct split
• Incorrect IGST/SGST splitting is one of the most common hotel GST audit findings across South India
• Corporate clients with GST registration numbers must receive invoices with their GSTIN on the face of the document

Invoice Requirements for Hotel GST Compliance

A GST-compliant hotel invoice must include: the hotel's GSTIN, the invoice number (sequential and unbroken), the date of supply, the guest's GSTIN if applicable, a clear breakout of accommodation charges, F&B charges, and applicable GST at each rate slab. Hotels that issue consolidated invoices without itemized GST breakout risk having their clients' Input Tax Credit claims rejected — which creates downstream complaints and lost corporate accounts.

How Your PMS Should Handle GST Automatically

A modern hotel PMS should require zero manual GST calculation from your accounting team. Rate slabs should apply automatically based on declared room rate. IGST vs SGST determination should trigger from the guest address captured at check-in. Invoice formatting should produce a GST-compliant document without customization. MyHotelKit handles all of this automatically, with no manual intervention required.

GST Return Filing for Hotels

Hotels registered under GST must file GSTR-1 (outward supplies) monthly or quarterly, and GSTR-3B (summary return) monthly. Your PMS should generate the data export for both filings directly — a GSTR-1 report and a tax summary that your CA can upload to the GST portal without rebuilding reports from raw invoices. This alone saves most Indian hotels 5–8 hours of accounting time per month.