The Managing Director/CEO’s/Owners/Director/Partners/General Managers
All FHRAI Members
CC: All Members of the Executive Committee
All Regional Associations
The President
Sub.: Next-Gen GST Reforms and their Implementation
Dear Member,
Greetings from FHRAI!
This is with reference to our earlier email communication on ‘Next-Gen GST Reforms and their Implementation’.
Kindly note that there was an inadvertent mistake in the earlier communication with regard to tax liability for hotels with room tariff of ₹1,000 or less. In this regard, please find the correct information as below. We sincerely regret the inconvenience.
As you may be aware that on 3rd September 2025, the 56th meeting of the GST Council has approved Next-Gen GST reforms, with focus on improving the lives of the common man and ensuring ease of doing business for all.
The GST Council has recommended a comprehensive reform package that includes rate rationalization with a simplified two-slab structure (5% and 18%) across sectors to make GST simpler, fairer, and more growth-oriented. The revised rates and exemptions will come into effect from 22nd September 2025.
Implications for the Hospitality Industry
- Hotel room tariffs and Food & Beverage services will be subject to two slabs of 5% and 18%.
- Hotels with room tariff above ₹7,500 will continue to be subject to 18% GST with full input tax credit (ITC) benefits on room tariff and F&B services.
- Hotels with room tariff upto ₹7,500 will now be subject to 5% GST without ITC benefits on room tariff and F&B services instead of previous 12%.
Towards this, we are happy to enclose the two FAQs released by the Ministry of Finance for your ready reference.
We look forward to your kind cooperation in its implementation at your end.
For any further support, please feel free to reach us.
Best regards,
Jaison Chacko
Secretary General
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The Federation of Hotel & Restaurant Associations of India
Regd. Office: B-82, 8th Floor, Himalaya House, 23 K.G. Marg, New Delhi - 110 001
Tel.: 011-40780780, E-mail: fhrai@fhrai.com, Website: www.fhrai.com