Finance Ministry Clarifies Hotels Up to Rs 7500 Tariff to Pay 5% GST Without ITC

The Finance Ministry clarified that hotels charging room tariffs up to Rs 7,500 per night will pay a fixed GST rate of 5% without the benefit of Input Tax Credit (ITC). This clarification removes ambiguity in GST application and keeps affordable hotel services under a simplified tax regime. Hotels exceeding this tariff threshold are subject to different tax provisions, including entitlement to ITC. The notification aims to lessen compliance burden for budget hotels and boost affordability in the hospitality sector while ensuring fair tax revenue collection.