18% GST instead of 5% to be charged on dining in a hotel

 GST: From April 1, 2025 restaurants inside hotels will have to charge 18% GST from customers instead of 5% previously if the said restaurant satisfied the definition of 'specified premises'. However, restaurants who do not satisfy this definition of specified premises have an option to either charge 18% GST or 5% from customers.

What is the new definition of specified premises?

According to a circular dated March 27, 2025, here’s what the government said: With effect from April 1, 2025, “Specified premises,” for a financial year, means:

·  A premises from where the supplier has provided in the preceding financial year, hotel accommodation’ service having the value of supply of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent; or

·  A premises for which a registered person supplying ‘hotel accommodation’ service has filed a declaration, on or after the 1st of January and not later than the 31st of March of the preceding financial year, declaring the said premises to be speci ..

A premises for which a person applying for registration has filed a declaration, within fifteen days of obtaining acknowledgement for the registration application, declaring the said premises to be specified premises

“As per the above definition, a premises from which ‘hotel accommodation’ services, having the value of supply of any unit of accommodation more than Rs. 7,500 per unit per day or equivalent, have been supplied in a financial year, becomes a ‘specified premises’ for the subsequent financial year,” said the Central Board of Indirect Taxes and Customs (CBIC).