The Central Board of Indirect Taxes and Customs (CBIC) on the recommendation of the 55th GST Council Meet has notified the amendment in the definition of specified premises to link it with actual value of supply of any unit of accommodation provided by hotel.
The board with the objective to omit the definition of declared tariff and suitably amend the definition of specified premises (from the services rate and exemption notifications) to link it with actual value of supply of any unit of accommodation provided by the hotel and to make the rate of GST applicable on restaurant services in such hotels, for a given financial year.
Further, dependent upon the ‘value of supply’ of units of accommodation made in the preceding financial year, i.e. 18% with ITC if the ‘value of supply’ exceeded Rs. 7500 for any unit of accommodation in the preceding financial year, and 5% without ITC otherwise.
To give an option to pay tax on restaurant service in hotels at the rate of 18% with ITC, if the hotel so chooses, by giving a declaration to that effect on or before the beginning of the financial year or on obtaining registration.
As per the amended definition of “Specified premises” has 3 aspects.
Firstly, 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
Secondly, 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 31st of March of the preceding financial year, declaring the said premises to be a specified premises; or
Lastly, 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 a specified premises.
The changes to be made effective from 01.04.2025 to avoid any transition difficulties.
Notification Details
Notification No. 05/2025- Central Tax (Rate)
Date: 16/01/2025
