Background:
The 55th GST Council Meeting held on December 21, 2024, recommended to omit the definition of declared tariff and suitably amend the definition of specified premises (from the services rate and exemption notifications) to link it with actual value of supply of any unit of accommodation provided by the hotel and to make the rate of GST applicable on restaurant services in such hotels, for a given financial year, dependent upon the ‘value of supply’ of units of accommodation made in the preceding financial year, i.e. 18% with ITC if the ‘value of supply’ exceeded Rs. 7,500 for any unit of accommodation in the preceding financial year, and 5% without ITC otherwise. Further, to give an option to pay tax on restaurant service in hotels at the rate of 18% with ITC, if the hotel so chooses, by giving a declaration to that effect on or before the beginning of the financial year or on obtaining registration. The above changes to be made effective from April 01, 2025 to avoid any transition difficulties.
Now:
The CBIC vide Notification No. 05/2025-Central Tax (Rate) dated January 16, 2025, made the following amendments to Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017:
(i) in paragraph 4 relating to Explanation, with effect from the 1st day of April, 2025,-
(a) clause (xxxv) i.e. Declared Tariff shall be omitted;
(b) for clause (xxxvi), the following clause shall be substituted, namely:-
(a) a premises from where the supplier has provided in the preceding financial year, ‘hotel accommodation’ service having the value of supply of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent; or
(b) a premises for which a registered person supplying ‘hotel accommodation’ service has filed a declaration, on or after the 1st of January and not later than 31st of March of the preceding financial year, declaring the said premises to be a specified premises; or
a premises for which a person applying for registration has filed a declaration, within fifteen days of obtaining acknowledgement for the registration application, declaring the said premises to be a specified premises;”;
(ii) after Annexure VI, the following Annexures shall be inserted, namely:-
- Annexure VII: Opt-In Declaration for Registered Person- Declaration by a registered person supplying hotel accommodation service before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.
- Annexure VIII: Opt-In Declaration for Person Applying for Registration- Declaration by a person applying for registration before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.
- Annexure IX: Opt-Out Declaration: Declaration by a registered supplier of hotel accommodation service before the jurisdictional GST authority declaring the premises as not a ‘specified premises.
Further, the CBIC vide Notification No. 08/2025-Central Tax (Rate) dated January 16, 2025 has made following amendments in Notification 17/2017- Central Tax (Rate) dated June 28, 2017 [Categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator (ECO)]:
- In the said notification, in the Explanation, for item (c), the following shall be substituted, namely, –
“ “specified premises” has the same meaning as assigned to it in clause (xxxvi) of paragraph 4 of notification number 11/2017-Central Tax (Rate) dated 28.06.2017.”
- This notification shall come into force with effect from the 1st day of April, 2025.
Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
The Notifications can be accessed at below:
Notification No. 05/2025-Central Tax (Rate): https://a2ztaxcorp.net/wp-content/uploads/2025/01/CBIC-N.No_.-05_2025-CUI-Rate.pdf
Notification No. 08/2025-Central Tax (Rate): https://a2ztaxcorp.net/wp-content/uploads/2025/01/CBIC-N.No_.-08_2025-CUI-Rate.pdf
