CBIC Releases FAQs on ‘Restaurant Service’ Supplied at ‘Specified Premises’: GST Registration, Tariff & Declarations Included
The FAQs clarify that hotels or establishments can opt to be classified as ‘specified premises’ even if their room tariff does not exceed ₹7,500 in the preceding financial year
The Central Board of Indirect Taxes and Customs (CBIC) has released a comprehensive set of Frequently Asked Questions (FAQs) regarding the Goods and Services Tax (GST) treatment of restaurant services supplied at ‘specified premises.’ The document, uploaded on the official website of the CBIC provides extensive clarity on the taxation framework, registration requirements, and...
The Central Board of Indirect Taxes and Customs (CBIC) has released a comprehensive set of Frequently Asked Questions (FAQs) regarding the Goods and Services Tax (GST) treatment of restaurant services supplied at ‘specified premises.’ The document, uploaded on the official website of the CBIC provides extensive clarity on the taxation framework, registration requirements, and declaration process for hotels and establishments offering restaurant services within these premises.
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By definition, specified premises’ refer to locations where the declared room tariff for accommodation exceeds ₹7,500 per unit per day. Restaurants operating within such establishments are subject to an 18% GST rate with the benefit of input tax credit (ITC), whereas restaurants outside such premises attract a 5% GST rate without ITC
The classification was formalized following the decision of the 55th GST Council Meeting and shall come into effect from April 1, 2025.
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The FAQs clarify that hotels or establishments can opt to be classified as ‘specified premises’ voluntarily, even if their room tariff does not exceed ₹7,500 in the preceding financial year. However, once opted in, the classification remains valid until the hotel explicitly chooses to opt out. Additionally, the CBIC has highlighted that a separate declaration must be made for each establishment to ensure accurate classification and compliance with GST regulations.
The tariff is based on the maximum amount charged for a unit of accommodation per day, as declared by the hotel. Discounts or concessional rates offered to guests do not impact the classification of the establishment as a ‘specified premise.’
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Additionally, the document provides insights on GST registration requirements for restaurant services in specified premises. One of the key clarifications is that even if an establishment falls under the category of ‘specified premises,’ a separate GST registration may not be required exclusively for the restaurant service component. The GST obligations remain tied to the overall business entity, ensuring administrative convenience for operators.
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The FAQs are slated to address long-standing concerns and ambiguities within the hospitality sector, specifically regarding the applicability of GST on restaurant services in hotels.
To Read the full text of the Order CLICK HERE
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