GST Exemption on Services Provided by Hotels, Inns, and Guest Houses for Residential or Lodging Purposes Under Rs. 1000

7/4/20241 min read

Introduction to GST Exemption

This blog post focuses on the GST exemption applicable to services provided by hotels, inns, guest houses, clubs, and similar establishments for residential or lodging purposes when the value of the service is less than Rs. 1000.

Understanding the GST Exemption Criteria

Under the GST Act, services provided by hotels, inns, guest houses, clubs, and other similar establishments for residential or lodging purposes are exempt from GST if the declared tariff for a unit of accommodation is less than Rs. 1000 per day. This exemption is aimed at making basic lodging services more affordable and accessible to the general public, especially budget travelers and low-income groups.

Implications for Service Providers

Service providers such as hotels, inns, and guest houses that offer lodging services with tariffs below Rs. 1000 per day benefit from this exemption as it simplifies their compliance requirements. They do not need to charge GST on these services or file GST returns for them. This reduces administrative burdens and costs associated with tax compliance. However, it is essential for these establishments to maintain accurate records of their tariffs and ensure they do not exceed the Rs. 1000 threshold to continue qualifying for the exemption.

Benefits for Consumers

Consumers stand to benefit significantly from this GST exemption. Lodging services priced under Rs. 1000 are more affordable as they do not attract additional tax. This is particularly beneficial for budget-conscious travelers such as students, backpackers, and low-income families. By availing accommodation options that fall within this exemption bracket, consumers can enjoy cost savings on their travel and lodging expenses.

Conclusion