Families booking rooms for a wedding in Jaipur or a holiday in Goa often see two hotels with similar prices end up with very different bills after tax. The reason is how GST on hotel room charges works: the rate is decided by the tariff of each room for each night. This guide explains the rule with examples and shows how to split a group booking fairly.
GST on hotel room bills: the per-night rule
GST on accommodation is charged at a rate that depends on the transaction value per room per night, the price actually charged after discounts, not the published rack rate and not the total of the stay. Under the rates revised from 22 September 2025, rooms charged up to ₹7,500 a night attract 5%, and rooms above ₹7,500 attract 18%. Very low tariffs have their own treatment in the notifications; check the hotel invoice and the current notification for those.
My stay totals ₹22,000. Is that taxed at 18%?
No. If the room is ₹5,500 a night for four nights, each night is below ₹7,500, so the lower rate applies to the whole room charge. The total of the stay doesn't decide the slab.
Discounts can change the slab
A room listed at ₹8,000 but sold at ₹7,200 after a discount is taxed on ₹7,200, so it falls in the lower slab. That makes a ₹800 discount worth much more than ₹800 once tax is counted.
| Tariff per night | GST rate | GST | Total per night |
|---|---|---|---|
| ₹8,000 | 18% | ₹1,440 | ₹9,440 |
| ₹7,200 | 5% | ₹360 | ₹7,560 |
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Food, extra beds and other charges
- Restaurant food and room service are taxed under the rules for restaurant services, which differ from the room rate.
- Extra bed charges billed with the room usually form part of the room's value; ask how the hotel bills them.
- Banquets and events are a separate service with their own GST treatment.
Splitting a group booking fairly
For a wedding block of 20 rooms for 2 nights at ₹4,500 with 10% group discount and 1 complimentary room:
Tariff after discount = 4,500 × 0.90 = ₹4,050 (5% slab) Paid rooms = 20 − 1 = 19 Room charges = 4,050 × 19 × 2 = ₹1,53,900 GST at 5% = ₹7,695 Total = ₹1,61,595 → per room for 2 nights ≈ ₹8,080
Dividing the total by all 20 rooms (including the complimentary one) gives each family the same fair share.
The hotel calculator applies the per-night slab after discount, handles complimentary rooms and extras, and shows the per-room share; both GST rates can be edited if a notification changes them.
Frequently asked questions
How is GST on a hotel room calculated?
At the rate for the tariff actually charged per room per night, applied to the room charges.
What is the GST on a room above ₹7,500 a night?
18%, under the rates revised from 22 September 2025.
Does a discount change the GST rate on a hotel room?
Yes. The slab depends on the discounted tariff actually charged.
Is GST charged on the total bill or per night?
The rate is decided per room per night.
How do I split a group hotel bill?
Add room charges and GST for all paid rooms, then divide by the total number of rooms used, including complimentary ones.
Keep reading
- Hotel Stay Calculator: the free tool this guide explains.
- All general calculators
Sources: GST Council notifications on hotel accommodation (rates by per-night transaction value; revised with effect from 22 September 2025).