GST on Hotel Bookings, MICE Events and Travel Packages: Step-by-Step Compliance Playbook
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.
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 The old nil-below-₹1,000/12%-up-to-₹7,500 structure is obsolete.
| 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
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.