Effective from April 1, 2025
📜 Notification No. 05/2025-Central Tax (Rate) & 08/2025-Central Tax (Rate) dated January 16, 2025
Key Changes and Impact
1. Omission of “Declared Tariff”
The definition of “declared tariff” has been omitted.
| ✅ GST will now be determined based on the actual value charged to the customer rather than the advertised or published tariff. |
| ✅ Fairer Tax Structure |
2. Revised Definition of “Specified Premises”
The definition has been updated to provide more clarity and flexibility for hotel operators.
| The GST rate for restaurant services within hotels will now be based on the value of accommodation supplied in the preceding financial year. |
| Optional Flexibility: Hotels can opt for an 18% GST rate with ITC for their restaurant services, regardless of room rates, by filing a declaration at the start of the financial year or upon registration. |
3. Classification of “Specified Premises”
| Criteria | Details |
|---|---|
| (a) High-Value Accommodation | Hotels offering rooms valued at above ₹7,500 per unit per day or equivalent in the preceding financial year are considered “specified premises.” |
| (b) Declaration by Existing Hotels | Hotels can declare themselves as “specified premises” between January 1st and March 31st of the preceding financial year. This enables them to opt for an 18% GST rate with ITC for restaurant services, regardless of room rates. |
| (c) Declaration by New Hotels | New hotels applying for GST registration can declare themselves as “specified premises” within 15 days of acknowledgment of their registration application. |
4. GST on Restaurant Services Provided Through E-Commerce Operators (ECOs)
As per Notification No. 17/2017-Central Tax Rate dated June 28, 2017, Electronic Commerce Operators (ECOs) are required to pay GST on restaurant services provided through their platforms. However, this rule does not apply when supplied by restaurants, eating joints, or similar establishments located at “specified premises.”
🔹 Changes in Definition of Specified Premises for E-Commerce Operators
📌 Explanation (c) of the notification has been amended to align with the new definition of “specified premises” as stated above.
| Impact | Explanation |
|---|---|
| ✅ Hotels providing accommodation services with an accommodation charge of less than ₹7,500 per unit per day but opting to declare their hotels as specified premises shall now pay GST on restaurant services supplied through e-commerce platforms on their own. | This means that E-Commerce Operators (ECOs) are not required to pay GST on such restaurant services. |
📢 Key Takeaway:
These changes ensure better clarity in tax applicability for hotel and restaurant services while allowing businesses to choose tax structures that best suit their operations.
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