GST & Indirect Tax

GST on Hotel Bookings, MICE Events and Travel Packages: Step-by-Step Compliance Playbook

📅 June 2026GST✔ cbic-gst.gov.in

Reviewed by CA Nikhil Gupta · Last reviewed 3 July 2026

Hotels, travel agents and MICE organisers operate under a layered GST structure with room tariff-linked rates, tour operator margins and ITC restrictions. This playbook maps the GST position for corporate travel managers and hospitality CFOs.

For the connected rule, example or next step, see GST on Director Services and Reverse Charge: Step-by-Step Compliance Playbook.

Hotel Room GST: Tariff-Linked Rates (Updated 22 September 2025)

The hotel accommodation rate structure changed under the 56th GST Council meeting, effective 22 September 2025. The old nil-below-₹1,000/12%-up-to-₹7,500 structure is obsolete.

For the connected rule, example or next step, see GST TCS for E-Commerce Operators: Section 52 and GSTR-8 Compliance Guide.

Tariff Per Unit Per Day	GST Rate	ITC for Business?
₹7,500 or below	5% (mandatory, without ITC) — cut from the earlier 12%; hotels cannot opt for 18% with ITC on these units	No — the hotel itself cannot claim ITC on inputs for these rooms, and the 5% charged to the guest does not carry forward as a creditable tax the way a 12%/18% rate would for the hotel's own purchases
Above ₹7,500	18%, with ITC available to the hotel	Yes — a registered business guest can claim ITC on the GST charged for stays above this threshold, for business purposes, with the corporate GSTIN on the invoice

ITC on hotel stay is available to a registered corporate guest only on the 18% above-₹7,500 segment, when the stay is for business purposes and the hotel invoice shows the corporate GSTIN. Stays at or below ₹7,500/day no longer carry the option to charge 18% with ITC, so there's no ITC pass-through to the corporate guest on those bookings.

MICE Events: GST on Venue and Services

A full MICE (Meetings, Incentives, Conferences, Exhibitions) package is not automatically split into separately-rated components for GST purposes. Whether it's taxed as a composite supply (one principal supply with the rest naturally bundled, taxed at the principal supply's rate) or a mixed supply (independent supplies bundled only for pricing convenience, taxed at the highest applicable rate) depends on the facts — primarily whether the elements are naturally bundled in the ordinary course of business and supplied together for a single price.

Venue/hall hire only (no catering): 18% GST if commercial
Banquet + catering genuinely bundled as part of one event package, billed as a single composite supply: taxed at the rate applicable to whichever element is the principal supply on the facts — this is not a mechanical "split the bill" exercise, and getting the composite-vs-mixed classification wrong is a common dispute area
Full MICE package (venue + food + AV + accommodation) billed as separate line items with distinct, severable pricing: each line item is generally taxed at its own applicable rate rather than forced into one blended rate

Travel Packages and Tour Operators

Tour operator services (Notification 11/2017-CT(R), Heading 9985(i)): 5% GST on the gross/consolidated amount charged for the tour package — this is a fixed concessional rate on the full package value, not a margin scheme calculated on profit margin. ITC on goods and most services used to supply the tour is blocked, except ITC on input services procured from another tour operator in the same line of business. There is generally no option to instead charge 18% with full ITC for genuine tour-operator services meeting the notification's conditions (consolidated billing covering accommodation and transport).
Pure agent/commission-only arrangement (e.g., booking agent earning a fee without bundling accommodation/transport into a consolidated tour price): taxed as a separate service at the applicable rate on the commission/fee, not under the tour-operator entry
Air tickets: economy class 5% (unchanged); premium economy, business and first class moved from 12% to 18%, effective 22 September 2025 (with ITC available on the 18% premium-class component for business travel)

Case Study: Corporate Off-site — 50 Employees, 2 Nights

Budget: Rs.12L (post-22 September 2025 rates)

Hotel rooms (Rs.6,000/night × 25 × 2 = Rs.3L; below the Rs.7,500/day threshold)

Rs.3L × 5% = Rs.15,000 (ITC NOT available — mandatory no-ITC rate at this tariff band)

Conference room hire

Rs.50,000 × 18% = Rs.9,000 (ITC available)

Catering/meals (billed as a separate line item)

Rs.2L × 5% = Rs.10,000 (ITC BLOCKED)

Net ITC recoverable

Rs.9,000 (conference room only); hotel GST Rs.15,000 and food GST Rs.10,000 are both hard costs at this tariff band

If the company had instead booked rooms above the Rs.7,500/day threshold, the hotel GST would be 18% with ITC available — a useful planning consideration for corporate travel budgets post-September 2025, since the lower headline room rate doesn't always mean the lower total cost once ITC is factored in.

FAQ

Can a company claim ITC on hotel GST for employee travel? +

It depends on the room tariff. For rooms above Rs.7,500/unit/day, the hotel charges 18% with ITC, and a registered business can claim that ITC if the invoice is in the company name with company GSTIN and the stay is for business purposes. For rooms at or below Rs.7,500/unit/day, the mandatory rate from 22 September 2025 is 5% without ITC — the hotel cannot offer an 18%-with-ITC option at this tariff band, so there is no ITC available to the corporate guest on these bookings regardless of how the invoice is structured.

Is GST applicable on airline ticket booking? +

Yes — 5% on economy class fares (unchanged). Premium economy, business and first-class fares moved from 12% to 18% with effect from 22 September 2025. Travel agents charge 18% on their own service fee separately, distinct from the airline's ticket-fare GST. ITC on airline tickets for business travel is available at whichever rate applies to the class booked, provided the GSTIN is correctly captured on the ticket/invoice.

What is GST on a foreign tour package sold in India? +

An Indian tour operator selling an outbound package to an Indian customer is not automatically exporting services just because the destination and on-ground consumption are overseas — place of supply for tour operator services follows the specific place-of-supply rules for the underlying components, and the recipient (an Indian customer) being in India is generally decisive, not where the trip physically happens. Genuine export-of-service treatment requires meeting all five conditions under Section 2(6) of the IGST Act, including that the recipient is located outside India — which an Indian traveller usually isn't. This is a frequently misunderstood area; don't assume overseas consumption alone creates zero-rating.

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Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: GST & Indirect Tax
Official starting point: www.gst.gov.in

Page source links

Primary sources & related provisions

Statutory provisions referenced in this guide:

Section 52 - CGST Act, 2017