The CBIC has issued clarifications and FAQs regarding the revised GST treatment for restaurant services offered at “specified premises”, bringing a major shift in how hotel premises are classified and taxed.
Here are the key takeaways every hotelier and restaurateur should know:
🍽️ What’s Changing?
🔹 ‘Declared Tariff’ Out, ‘Value of Supply’ In
Starting FY 2025-26, a hotel will be classified as a “specified premises” based on actual transaction value (> ₹7,500/unit/day), not the published tariff.
🔹 GST Rate Difference
• 18% GST with ITC at specified premises
• 5% GST without ITC at other premises
🔹 Flexible Opt-In/Out Mechanism
Hotels can voluntarily declare their premises as specified using Annexure VII/VIII. Once declared, it applies until an opt-out is filed.
🔹 Multiple Premises?
Each premise must be evaluated individually. One high-value supply doesn’t make the entire registration specified.
🔹 Restaurants in Malls
Only restaurants inside the hotel premises (as per declared address) are affected. Others continue at 5% GST.
📌 Action Required:
• File Annexure VII/VIII between Jan 1 – Mar 31 for next FY
• Monitor your value of supplies for auto-qualification as specified premises
• Check if input tax credits justify opting for 18% GST
📄 Forms & full FAQs available on CBIC portal:
🔗 https://www.cbic.gov.in/entities/cbic-content-mst/MTE5
💡 This change reflects the dynamic pricing model of today’s hotel industry and gives businesses more control over their tax positions.