What is the GST rate on homestay rooms priced below ₹7,500 per night?

Homestay rooms where the actual transaction value is up to ₹7,500 per unit per day attract 5% GST without Input Tax Credit (ITC). This rate was reduced from 12% to 5% by the 56th GST Council in September 2025. Note that the earlier exemption for rooms below ₹1,000 was removed in July 2022 — all rooms are now taxable regardless of tariff. GST registration is mandatory if your annual turnover exceeds ₹20 lakh (₹10 lakh in NE/special category states).

What is the GST rate for homestay rooms priced above ₹7,500?

Homestay rooms with a transaction value above ₹7,500 per night attract 18% GST with full Input Tax Credit (ITC). This means you can claim ITC on your business purchases — furniture, renovation materials, software subscriptions, supplies — and offset them against the GST you collect from guests. The rate slab is now determined by the actual amount charged to the guest, not the declared tariff (rack rate).

Do small homestays with low revenue need GST registration?

GST registration is mandatory only if your aggregate annual turnover exceeds ₹20 lakh (₹10 lakh for special category states in the Northeast and hill states). If your homestay revenue is below this threshold, registration is optional. However, voluntary registration can be beneficial if you want to claim ITC on business expenses or appear more professional to corporate guests.

Is the GST rate based on declared tariff or actual amount charged?

The GST rate slab is determined by the actual transaction value (the amount charged to the guest), not the declared tariff (rack rate) — the "declared tariff" concept was replaced by "value of supply" back in 2018. So if your rack rate is ₹8,000 but you charge ₹6,500 after a discount, you pay 5% GST on ₹6,500 (since the transaction value is below ₹7,500). The 56th GST Council (September 2025) kept this transaction-value basis and cut the lower slab from 12% to 5%.

Can I claim Input Tax Credit (ITC) on homestay GST?

ITC is available only at the 18% rate (rooms above ₹7,500 per night). At the 5% rate (rooms up to ₹7,500), ITC is not available. ITC allows you to offset the GST you pay on business purchases (furniture, supplies, renovation materials, software subscriptions) against the GST you collect from guests. For homestays with rooms above ₹7,500 that incur significant input costs, the ITC benefit can substantially reduce your effective tax outgo.

What SAC code should I use for my homestay?

The primary SAC code for homestay accommodation is 996311 (Room or unit accommodation services provided by hotels, inns, guest houses, etc.). If you serve food and beverages, use SAC 996332 for those services. The broader category SAC 9963 covers all accommodation services. Always mention the correct SAC code on your GST invoices to avoid compliance issues.

How do I issue GST-compliant invoices for my homestay?

A GST-compliant invoice must include: your GSTIN, invoice serial number, date, guest name and address, SAC code (996311), taxable value, tax rate, CGST and SGST amounts (for same-state guests) or IGST amount (for out-of-state guests), total amount, and place of supply. MyHomestay.ai generates GST-compliant invoices automatically with the correct tax breakdowns.

Is food served at a homestay taxed separately under GST?

It depends. If food is included in the room tariff as a composite supply (room + breakfast), the entire amount is taxed at the room rate (5% or 18%). However, if food is billed separately from the room charge, it is treated as a restaurant service and taxed at 5% GST without ITC. Many homestays include breakfast in the room rate to simplify billing.

What happens if I do not register for GST despite crossing the threshold?

Operating without GST registration when your turnover exceeds the threshold is a serious offence. Penalties include: a fine of ₹10,000 or the tax amount due (whichever is higher), interest at 18% per annum on unpaid tax, and potential prosecution for repeated non-compliance. The GST department can also assess and recover taxes for past periods. It is strongly advisable to register promptly when approaching the threshold.

Do I need to charge IGST for guests from other states?

No. For accommodation services, the place of supply is the location of the property (hotel/homestay), not the guest's home state. So even if a guest from Maharashtra stays at your homestay in Goa, you charge CGST + SGST (not IGST) because the service is provided in Goa. IGST applies only when the supplier and place of supply are in different states, which does not happen for accommodation.

Can I use the Composition Scheme for my homestay?

No. Hotel and accommodation services are not eligible for the Composition Scheme under the current GST rules. The Composition Scheme is available for standalone restaurants (at 1% — 0.5% CGST + 0.5% SGST) and certain goods suppliers, but it explicitly excludes accommodation services. Homestay owners must register under the regular GST scheme and file monthly or quarterly returns (QRMP scheme for turnover up to ₹5 crore).

How does MyHomestay.ai handle GST invoicing for homestays?

MyHomestay.ai automatically generates GST-compliant invoices for every booking. It detects whether the room value falls in the 5% or 18% slab, applies the correct CGST + SGST rates, includes proper SAC codes, maintains sequential invoice numbering, and stores all records digitally for easy GST return filing. This eliminates manual calculation errors and saves hours of accounting work each month.

AI Tools

Channel Manager

Existing Customer Support

ComplianceUpdated for 2026

Complete GST Guide for Homestays in India 2026

Everything Indian homestay owners need to know about GST — rates, exemptions, registration, invoicing, SAC codes, and filing deadlines. Stay compliant without the confusion.

10 min readBeginner FriendlyIndia Specific

Key Facts at a Glance

Rooms up to ₹7,500

Reduced from 12% in Sep 2025 (56th GST Council). No ITC.

18%

Rooms above ₹7,500

Full ITC available on business inputs — furniture, supplies, software

₹20L

Registration Threshold

Mandatory if turnover exceeds ₹20 lakh (₹10 lakh for NE states)

Rate Structure

GST Rate Breakdown for Homestays

After the 56th GST Council changes (Sep 2025), GST on accommodation is 5% up to ₹7,500 and 18% above, charged on the actual transaction value paid by the guest. All rooms are taxable — the earlier exemption for budget rooms was removed in 2022.

5%Standard

Room value up to ₹7,500 per night (effective Sep 2025)

ITC: Not available

18%Premium

Room value above ₹7,500 per night

ITC: Available on all business inputs

Simplified: Transaction Value Determines the Slab

The GST slab is determined by the actual transaction value (amount charged to the guest), not the declared tariff (rack rate) — a rule in place since 2018. For example, if your rack rate is ₹8,000 but you offer a discount and charge ₹6,500, you pay 5% GST on ₹6,500 = ₹325 (since the transaction value is below ₹7,500). This simplification benefits homestays that frequently offer discounts.

Registration

Who Needs to Register for GST?

GST registration depends on your annual turnover, not on the number of rooms or room tariff.

Mandatory Registration

Aggregate turnover exceeds ₹20 lakh per annum
Threshold is ₹10 lakh for NE and special category states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh)
If you supply services through e-commerce platforms (some exceptions apply)

Voluntary Registration Benefits

Claim ITC on business purchases (furniture, renovation, supplies, software)
Appear more professional and credible to corporate guests and travel agents
Issue proper tax invoices — essential for B2B clients who need to claim ITC
Eligible for government tenders and institutional bookings

Composition Scheme Not Available for Accommodation

Hotel and accommodation services are not eligible for the Composition Scheme under current GST rules. The Composition Scheme is available for standalone restaurants and certain goods suppliers, but explicitly excludes accommodation services. Homestay owners must register under the regular GST scheme. You can opt for the QRMP (Quarterly Return Monthly Payment) scheme if your turnover is below ₹5 crore, which allows quarterly filing instead of monthly.

Step-by-Step

How to Register for GST

GST registration is done entirely online through the GST portal. Here is the complete process.

Documents Required

PAN card of the owner or business entity

Aadhaar card of the proprietor / partners / directors

Proof of business address (electricity bill, rent agreement, or property tax receipt)

Bank account statement or cancelled cheque

Passport-size photographs of the applicant

Digital signature (for companies and LLPs)

Letter of authorization or board resolution (for companies)

Visit the GST Portal

Go to gst.gov.in and click on "Services" then "Registration" then "New Registration". Select "Taxpayer" as the type.

Fill Part A — Basic Details

Enter your PAN, mobile number, and email address. You will receive OTPs on both for verification. A Temporary Reference Number (TRN) is generated.

Fill Part B — Business Details

Using the TRN, complete Part B with business name, constitution (proprietorship/partnership/company), trade name, principal place of business address, and bank details.

Upload Documents

Upload scanned copies of PAN, Aadhaar, address proof (electricity bill/rent agreement), bank statement, and photographs. All documents must be clear and legible.

Verify and Submit

Verify all details, sign using Aadhaar OTP, EVC (Electronic Verification Code), or DSC (Digital Signature Certificate), and submit the application.

Receive GSTIN

The GST officer reviews your application. If approved, you receive your 15-digit GSTIN within 7-15 working days. The GSTIN structure is: 2 digits (state code) + 10 digits (PAN) + 1 digit (entity number) + 1 digit (default Z) + 1 check digit.

Timeline: The typical processing time is 7-15 working days from submission. If the officer raises a query, you get 7 days to respond. Ensure all documents are correct to avoid delays. You can track status on the GST portal using your TRN or ARN (Application Reference Number).

SAC Codes

HSN/SAC Codes for Homestays

SAC (Services Accounting Code) is the classification code for services under GST. Using the correct code on invoices is mandatory.

SAC Code	Description	Applicable For
9963	Accommodation services (broad category)	Overall classification for all accommodation providers
996311	Room or unit accommodation by hotels, guest houses, homestays	Primary — Use this for room charges
996332	Food and beverage serving services	Only if food is billed separately from room charges
996313	Camping and recreational vehicle accommodation	For homestays offering tent or glamping experiences

Invoicing

GST Invoice Requirements

Every GST-registered homestay must issue a tax invoice for accommodation charges. Here is what your invoice must include.

GSTIN

Your 15-digit GST Identification Number

Invoice Number

Unique sequential number (e.g., INV-2026-001)

Invoice Date

Date of issue of the invoice

Guest Details

Name and address of the guest (billing name)

SAC Code

996311 for accommodation, 996332 for food

Taxable Value

Room charge before tax

Tax Breakdown

CGST + SGST amounts separately (or IGST if applicable)

Place of Supply

State where the homestay is located

Total Amount

Taxable value + tax amounts

HSN/SAC Summary

Summary of SAC codes used in the invoice

Example: Room above ₹7,500 (18% GST)

Room charged at ₹8,000 per night:

Room charge: ₹8,000

CGST @9%: ₹720

SGST @9%: ₹720

Total: ₹9,440

Place of Supply Rule

For accommodation services, the place of supply is always the location of the property (your homestay). This means you always charge CGST + SGST, regardless of the guest's home state. IGST does not apply to accommodation services in normal circumstances.

Automate Your Invoicing

MyHomestay.ai generates GST-compliant invoices automatically for every booking — with correct tax rates, SAC codes, sequential numbering, and proper CGST/SGST breakdowns. Explore the invoicing feature

Deadlines

GST Filing Deadlines

Missing filing deadlines attracts late fees and interest. Here are the key returns and their due dates.

GSTR-1Monthly

Details of outward supplies (sales)

Quarterly if turnover < ₹5 crore (QRMP scheme)

Due: 11th of the following month

GSTR-3BMonthly

Summary return with tax payment

Quarterly option available under QRMP scheme

Due: 20th of the following month

GSTR-9Annually

Annual return consolidating all monthly/quarterly returns

Not required if turnover < ₹2 crore

Due: 31st December of the following financial year

CMP-08Quarterly

Statement for Composition Scheme taxpayers

Not applicable for accommodation services (Composition Scheme not available)

Due: 18th of the month following the quarter

Late filing penalty: ₹50 per day for GSTR-3B and GSTR-1 (₹20 per day for nil returns), subject to a maximum of ₹2,000 per return for turnover up to ₹5 crore. Interest at 18% per annum is also charged on any outstanding tax liability.

Avoid These Errors

Common GST Mistakes Homestay Owners Make

These are the most frequent compliance errors we see. Avoid them to stay penalty-free.

Not registering despite crossing the threshold

Many homestay owners are unaware that crossing ₹20 lakh annual turnover (₹10 lakh in NE states) makes GST registration mandatory. Penalties can include ₹10,000 fine plus 18% interest on unpaid tax.

Applying the wrong GST rate

Rooms up to ₹7,500 per night attract 5% GST (reduced from 12% in Sep 2025). Rooms above ₹7,500 attract 18%. Applying the old 12% rate or the wrong slab inflates guest bills and creates complications when filing returns.

Using the wrong SAC code on invoices

Using incorrect SAC codes (e.g., using restaurant code for room charges) can trigger scrutiny during audits. Always use SAC 996311 for room accommodation and SAC 996332 for food services.

Confusing IGST with SGST+CGST for accommodation

For accommodation services, the place of supply is always the property location. You charge CGST + SGST, not IGST, regardless of whether the guest is from another state.

Not maintaining proper digital records

GST law requires you to maintain records of all invoices, receipts, and payments for at least 6 years. Paper registers are prone to damage and loss. Digital record-keeping is strongly recommended.

Ignoring separate GST on food and beverages

If food is billed separately from room charges, it attracts 5% GST (restaurant service) — not the same rate as the room. Mixing these up leads to incorrect tax calculations and potential penalties.

How MyHomestay.ai Simplifies GST

Stop worrying about tax calculations and invoice formatting. MyHomestay.ai handles GST compliance automatically so you can focus on hospitality.

Auto GST Invoicing

Every booking generates a GST-compliant invoice with correct SAC codes, CGST/SGST breakdowns, and sequential numbering.

Correct Rate Detection

The system automatically determines whether the room tariff is exempt or taxable and applies the correct GST rate.

Digital Record Keeping

All invoices, payment records, and guest details are stored digitally — ready for return filing or audit at any time.

Tax Summary Reports

Monthly and quarterly tax summaries ready for your accountant or CA, making GSTR-1 and GSTR-3B filing effortless.

FAQ

Frequently Asked Questions

Common questions about GST for homestays in India, answered clearly.

Automate Your GST Compliance

MyHomestay.ai generates GST-compliant invoices, calculates the right tax rates, and maintains digital records — so you never worry about compliance again.

See Pricing Explore Features

GST invoicing included in all plans. No extra charge.

Tax Guide

GST Compliance for Indian Homestays

Understanding GST is essential for every homestay owner in India. After the 56th GST Council changes (September 2025), rooms up to ₹7,500 per night attract 5% GST without ITC, while rooms above ₹7,500 attract 18% with ITC. The rate is based on the actual transaction value charged, not the declared tariff. This guide covers the complete GST framework for accommodation services — from SAC codes and rate structures to place of supply rules and filing deadlines. With tools like MyHomestay.ai, homestay owners can automate invoice generation, maintain digital records, and focus on delivering great guest experiences instead of tax paperwork.

Ready to Manage Your Homestay Smarter?

Simple annual subscription tailored to your property — contact us for pricing.