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Freedom251 › Blog › banquet hall tax

How GST applies to hotel rooms, event spaces and wedding services in India (2026 guide)

By Freedom251 Team · · 8 min read

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Assumption: This guide covers India’s GST. If the hotel is in another GST jurisdiction, these rates do not apply.

For an Indian hotel or resort, GST depends on the service actually supplied, its value and the venue’s classification—not simply on the fact that it is a wedding package. A room with a value of supply up to and including ₹7,500 per unit per day is taxed at 12% (6% CGST + 6% SGST/UTGST); above ₹7,500, the accommodation rate is 18%. Qualified outdoor catering, including certain catering-plus-function-premises arrangements, can be 5% without input tax credit (ITC), while supplies covered by the specified-premises category are generally 18%. The current CBIC schedule is the controlling reference: GST Goods and Services Rates, Heading 9963.

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A single wedding quotation may therefore contain several GST treatments. Read the line items, identify the legal entity issuing each invoice, and check the venue’s specified-premises status for the relevant financial year before comparing totals.

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GST rates at a glance

Service Rate and conditions What to verify
Hotel accommodation 12% (6% CGST + 6% SGST/UTGST) when the value of supply is ₹7,500 or less per unit per day; 18% above that threshold The value attributable to each accommodation unit and day, and whether other items have been bundled into the quoted amount
Qualified outdoor catering 5% (2.5% CGST + 2.5% SGST/UTGST), without ITC, where the entry’s supplier and non-specified-premises conditions are met Whether the supply is genuinely outdoor catering, the supplier’s status and the venue classification
Catering together with function-premises rental 5% without ITC only when the composite-supply entry’s conditions are satisfied; specified-premises cases fall in the 18% category Whether both catering and rental are supplied together, by whom and from what premises
Venue rental alone The 5% catering-plus-rental entry should not be assumed when no catering is supplied The exact classification and rate basis stated by the supplier; obtain professional advice if disputed
Rooms plus a full wedding package No universal package rate Itemisation, contract terms, supplier registrations and year-specific venue status

The CBIC entry describes the room threshold as “having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent.” The test is the value of supply in the current entry, not the hotel’s star rating.

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How GST applies to rooms

The ₹7,500 per-unit, per-day test

For each accommodation unit, calculate the value of supply for the day. At ₹7,500 or less, the applicable GST rate is 12%. At any value above ₹7,500, the rate moves to 18%. The threshold is inclusive: ₹7,500 remains in the 12% bracket.

Illustratively, a room valued at ₹7,500 for one day produces ₹900 GST at 12% (before considering whether the quoted figure is tax-inclusive). A room valued at ₹8,000 produces ₹1,440 GST at 18%. These examples show the arithmetic only; the invoice must establish the correct value of supply and whether separate services have been included.

Star ratings are not a substitute for the threshold

Do not use a property’s one-star-to-five-star classification to decide the current room rate. The current CBIC schedule uses the value-of-supply threshold. A 2017 government clarification said star rating was irrelevant to the then-current threshold; that historical statement does not replace the present schedule. See the 2017 PIB clarification only for that historical context.

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What happens when a room is part of a package?

A wedding quote may combine rooms, breakfast, transfers, décor or a banquet reservation. The room rate cannot be selected from the headline package price without examining what the contract says is being supplied and how the consideration is allocated. Ask the supplier to show the accommodation value per unit per day and to identify separately supplied items. If different entities issue the room and event invoices, each entity’s supply and registration must be reviewed independently.

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Wedding catering and event-space services

When the 5% catering rate can apply

The current rate entry permits 5% GST without ITC for qualifying outdoor catering. It also covers a composite supply of outdoor catering together with renting premises specially arranged for a function, including a hotel or convention centre, but only under the express supplier and non-specified-premises conditions. The wording in the CBIC schedule is: “Composite supply of ‘outdoor catering’ together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function)”. Read the complete entry at the CBIC service-rate schedule.

“Without ITC” describes the rate entry’s condition for the supplier. It is not a promise that every wedding-food invoice qualifies for 5%, and it does not remove the need to verify the recipient’s own credit position. The supplier should identify the applicable entry and the ITC restriction on the tax invoice.

When 18% applies

The schedule places corresponding catering and premises-rental supplies provided by suppliers at or from specified premises in the residual 18% category. A venue cannot choose 5% merely because the menu is called outdoor catering. The supplier, location and statutory conditions must all fit the entry.

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Venue rental without catering

If a hotel charges only for a hall, lawn or convention space and no catering is supplied, do not automatically apply the 5% composite catering-plus-rental rate. That entry is conditional on a supply that includes outdoor catering together with renting. The precise standalone classification depends on the facts and the supplier’s stated legal basis, so request the rate explanation on the quotation or invoice and obtain tax advice if the amount is material.

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Specified premises: the date that changes the analysis

CBIC Notification No. 05/2025-Central Tax (Rate), dated 16 January 2025, amended the definition of “specified premises” with effect from 1 April 2025. For a financial year, the definition can include premises where, in the preceding financial year, the supplier provided hotel accommodation with a value of supply above ₹7,500 per unit per day, as well as premises covered by the prescribed declaration mechanism. The notification and its timing requirements are available at Notification No. 05/2025-Central Tax (Rate).

That means a 2024 invoice, a 2025–26 invoice and a later invoice may not be tested against an identical venue status. Ask the hotel which financial year’s specified-premises determination it is using and retain its written explanation. Do not rely on an old blog post or a prior-year bill.

Does the room tariff affect GST on food?

Not as a blanket rule. The room’s ₹7,500 threshold determines the accommodation entry. Food and wedding catering are tested under their own entry, including the outdoor-catering, composite-supply, specified-premises and ITC conditions. A high room tariff may be relevant evidence when determining whether premises are “specified” for a later financial year, but it does not automatically turn every meal into 18% or every banquet into 5%.

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For example, a guest may book rooms below ₹7,500 per day and separately hire a banquet caterer. The room can qualify for 12% while the food is tested under the catering entry. Conversely, a room above ₹7,500 does not by itself prove that a separately invoiced caterer must charge 18%. The contract, supplier and venue facts control.

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What if the banquet booking includes food but no hall rent?

Use the actual supply, not the label “banquet package.” If the invoice charges only food or catering, the supplier must establish which catering entry applies. The 5% composite entry specifically describes outdoor catering together with renting of premises; it should not be used automatically where no premises rental is supplied or charged. A hotel might still have a different factual basis for its classification, but the invoice should state the relevant service description and rate.

Ask these questions before paying:

  • Is the supplier providing outdoor catering, an on-site restaurant service or another food service?
  • Is any hall, lawn or function-premises rental included in the consideration, even if shown as a zero line?
  • Is the supplier operating from specified premises for the relevant financial year?
  • Which legal entity and GST registration will issue the invoice?
  • Does the supplier claim the 5% entry and, if so, where is the no-ITC condition reflected?

Composite packages and multiple invoices

GST classification follows the real supply and contractual arrangement. A “full wedding package” might contain accommodation, catering, venue rental, décor, audiovisual equipment and outside vendors. One legal entity may supply everything, or the hotel may merely coordinate invoices from separate caterers and decorators. The rate schedule alone cannot decide whether a particular quote is one composite supply or several supplies.

Compare competing quotes on the same basis:

  • Room value per unit per day and the number of taxable nights
  • Whether venue rental and catering are both included
  • The venue’s specified-premises status for the relevant year
  • The rate and ITC condition claimed for catering
  • Each supplier’s legal name, GSTIN and invoice
  • Whether taxes are included in the displayed price or added separately

A lower displayed GST percentage does not by itself mean a lower lawful total. A 5% entry without ITC can have a different commercial effect from an 18% entry where the supplier is entitled to claim credits.

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Place of supply and the tax shown on the invoice

Accommodation in an immovable property used for a marriage or reception is generally connected to the property’s location under the IGST Act. Event-related services supplied to a registered recipient generally connect to where the event is actually held, subject to statutory exceptions. These rules can determine whether an invoice shows CGST plus the state tax or IGST, but the result depends on the recipient’s registration status and the exact service.

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Consult the CBIC-hosted IGST Act and the GST place-of-supply rules. Do not demand IGST or CGST/SGST solely because the customer lives in another state; the statutory place-of-supply rule for the service controls.

A practical check before signing a wedding contract

  1. Split the quote. Request separate amounts for rooms, catering, venue rental and other services.
  2. Check the room threshold. Confirm the value of each accommodation unit per day and whether the amount is tax-inclusive.
  3. Identify suppliers. Record the legal entity and GSTIN for the hotel, caterer and any event company.
  4. Ask about venue status. Obtain the specified-premises basis and the relevant financial year, especially for events on or after 1 April 2025.
  5. Test the catering entry. Confirm whether the supply is outdoor catering, whether premises rental is included and whether 5% is being claimed without ITC.
  6. Verify place of supply. Check the event location, recipient registration status and whether CGST/SGST or IGST is shown.
  7. Match invoice to contract. The final tax invoice should describe the supplied service, taxable value, rate, tax components and supplier registration consistently.
  8. Escalate uncertainty. For a large wedding, related-party booking or disputed classification, have a GST professional review the contract before payment.

Common mistakes to avoid

  • Using star rating: the current test is value of supply, not the number of stars.
  • Applying 5% to every wedding meal: the reduced entry has detailed conditions and a no-ITC restriction.
  • Ignoring the 2025 amendment: specified-premises status changed from 1 April 2025.
  • Treating a package as one rate: rooms, catering and rental may be separate supplies or supplied by different registrations.
  • Assuming a zero-priced hall is irrelevant: the contractual reality, not only the visible line-item price, matters.
  • Choosing tax type by customer address: place of supply follows the IGST rules for the service.

Records to retain

Keep the signed contract, itemised quotation, room-night schedule, banquet menu, venue-rental terms, supplier GSTINs, invoices, payment records and any written explanation of specified-premises status. These documents show what was supplied, by whom, for which period and at what value— the facts needed to defend the rate applied.

For a historical overview of service-rate changes, the 2018 PIB release on GST rates for services is useful, but it should not override the current CBIC schedule.

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