Site navigation

For a supply made on 10 November 2026, how is GST charged on ordinary hotel accommodation priced at ₹1,000 per room per day?

Question and options

For a supply made on 10 November 2026, how is GST charged on ordinary hotel accommodation priced at ₹1,000 per room per day?

  1. Nil, as an exempt supply

  2. 5%, with full credit of tax on all inputs and input services

  3. 5%, with credit only on rooms bought from other suppliers

  4. 18%, with full credit of tax on all inputs and input services

Answer and explanation

Correct answer: C - 5%, with credit only on rooms bought from other suppliers

Hotel accommodation with a value of supply up to ₹7,500 per unit per day is taxed at 5% (2.5% central tax plus 2.5% State tax); the 18% rate with full credit is not available for such rooms. From 1 November 2026, Notification No. 06/2026–Central Tax (Rate) allows input tax credit at this rate only on hotel accommodation procured from another hotel, limited to tax at 2.5% central tax, and continues to bar credit on all other goods and services. A room priced at ₹1,000 a day is taxable, not exempt.

Practice for these exams

Related exam syllabi

More solved explanations in GST - levy, supply, input tax credit, registration & returns