Hotel accommodation with meals above Rs 7,500 to attract 18% GST: WB AAR

NEW DELHI: The West Bengal Authority for Advance Ruling (AAR) has clarified that hotel accommodation bundled with meal plans will attract 18% GST if the combined value of services exceeds Rs 7,500 per room per day, regardless of whether food and lodging charges are shown separately in invoices.

The ruling was issued in response to an application by a hotel offering guests flexibility to choose from European Plan (EP), Continental Plan (CP), and American Plan (AP) meal-inclusive packages along with accommodation.

According to the order, the composite supply of hotel accommodation and meals will be treated as a bundled service, with accommodation as the principal supply.

“The total value of supply in a combined form (room charge and food charge) is to be considered for GST rate determination,” the AAR observed. It further clarified that if the hotel’s charges remain below Rs 7,500 per room per day in a financial year, the property will not qualify as a “specified premise” in the following year, and the lower GST rate will apply.

The GST rate on hotel rooms is 12% for room tariffs up to Rs 7,500 per night and 18% for room tariffs above Rs 7,500 per night.

On restaurant services offered to walk-in guests, the AAR held that the applicable GST rate will be 5% (2.5% CGST + 2.5% SGST) under Notification No. 05/2025, subject to prescribed conditions, so long as the hotel does not qualify as a “specified premise.” However, if in any financial year, tariffs for any unit exceed Rs 7,500 inclusive of meal charges, the premises will be considered “specified” in the next year, and restaurant services will also attract 18% GST.