No GST relief for customers at star category hotels in Kol
Times of India | 23 September 2025As the festive season is already on in the city and busy season for hotels will continue till March, almost 90% of the rooms in star category hotels here will attract 18% GST with input tax credit (ITC) for hoteliers, which was the case before the rollout of GST 2.0.
As per GST 2.0, rooms up to Rs 7,500 from Rs 2,500 will attract 5% GST, down from 12% earlier. However, there is a catch. GST rules state that ‘specified premises' that have charged over Rs 7,500 for even one day in the last financial year will attract GST at 18%.
‘Specified premises' are those where the tariff of any unit of hotel accommodation is Rs 7,500 or above.
A leading hotelier argued that due to demand, most of the rooms in even four-star or three-star categories will be charged over Rs 7,500 and will attract 18% GST.
The rate for restaurants, banquets, and catering in specified premises will also be charged at 18%.
An expert also pointed out that with star hotel rooms being mostly charged at 18% with ITC, it is like a double-edged sword for the industry. There has been a cut in GST to 5% from 12% for rooms between Rs 1,000 and Rs 7,500, but there will not be any ITC for hoteliers. In every hotel room, there are related services and other things required which attract GST at 12% to 18%, and the hotel owners get ITC benefit for that while depositing GST for room rent.
As far as star category hotels are concerned, there are around 5,000 such rooms in the city, and of this, over 4,500 will attract 18% GST. This includes five-star, four-star, and even three-star hotels.
President of HRAEI, Sudesh Poddar, hailed the GST reforms. He said budget hotels whose rates never cross Rs 7,500 will charge 5% GST. While customers will benefit in budget hotels, hoteliers will suffer as there will be no input tax credit, he said.
Kamal Raza, GM (development) of The Lalit Suri Hospitality Group, said only 40% of its hotel rooms in the city are below the Rs 7,500 range. K Mohanchandran, senior VP (operations) of IHCL, said most of the hotels of the Taj Group in Bengal will be under 18% GST only. Now, the group has 700 hotel rooms, which will go up to 900 after the opening of the Raichak property.
