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COMPLIANCE7 min readIndus Technologies

GST Compliance for Hotels: A Practical Guide for 2025

GST for hotels is more complex than most industries — different rates apply to rooms at different tariff levels, F&B has its own structure and events are treated separately. Getting it wrong means notices, penalties and audit complications. This guide covers the current GST structure for Indian hotels and how FortuneNext handles compliance automatically.

GST rates for hotel rooms (2025)

Hotel room GST in India is based on the declared tariff per room per night. The current structure:

Important: GST is applied on the declared tariff, not the discounted rate. If your standard rate is ₹8,000 but you offer a ₹6,000 promotional rate, GST is still calculated at the 18% slab applicable to the ₹8,000 tariff. FortuneNext handles this automatically.

GST on hotel F&B — restaurant and room service

F&B at hotels has its own GST structure:

GST on banquets and events

Banquet and event GST depends on what is bundled:

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Composite supply rules trip up many hotels. If you bundle accommodation and F&B in a package, GST on the package should follow the GST rate of the principal supply (accommodation). Consult a CA for your specific package structure.

How FortuneNext automates GST compliance

FortuneNext handles GST automatically once configured correctly during implementation:

  • Automatic rate selection based on room tariff at the time of billing
  • Correct CGST/SGST split for within-state transactions
  • IGST applied for interstate corporate billing
  • GST-compliant invoice format with all required fields
  • Monthly GST reports in the format required for GSTR-1 and GSTR-3B filing
  • Reconciliation reports to match PMS billing with GSTN returns

Why Indus Technologies also provides accounting support

Most software vendors install FortuneNext and leave. Indus Technologies goes further — we configure your GST structure correctly during implementation and provide ongoing support for GST-related questions. This is particularly valuable for hotels with complex package structures, outdoor catering, and mixed-use properties where GST treatment is not straightforward.

Common GST mistakes hotels make

These are the most frequent GST errors we see when taking over from legacy systems:

  • Applying GST on discounted rate instead of declared tariff
  • Using wrong F&B GST rates for different service types
  • Not separating accommodation and F&B for package billing
  • Missing HSN/SAC codes on invoices
  • Incorrect state code for interstate corporate billing
  • Not filing GSTR-1 on time due to poor monthly reporting systems

Key Takeaways

  • Hotel room GST is tariff-based — nil, 12% or 18% depending on declared room rate
  • GST applies on declared tariff, not discounted rate — a common and costly mistake
  • F&B GST is 5% for all restaurant formats; alcohol is state-specific
  • Banquet GST at 18% applies to hall rental; catering follows outdoor catering rules at 5%
  • FortuneNext automates all GST calculations once correctly configured at implementation
  • Indus Technologies provides GST setup and ongoing accounting support — not just software installation
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